Campaign Crawlers

The Obama Economy

It'll be up to John McCain to expose its shaky underpinnings.

By 7.9.08

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Barack Obama and John McCain are now going toe-to-toe on economics. Obama's main challenge: to convince voters he is not a classic tax-and-spend liberal. McCain's is to convince voters he is focused and determined to solve pocketbook issues.

McCain may have the tough time revealing his opponents' underlying predispositions. Obama has been talking a very a good game in the last few months. On taxes, for example, at the Philadelphia Democratic debate in April he swore off tax increases for the middle class, declaring, "Well, I not only have pledged not to raise their taxes, I've been the first candidate in this race to specifically say I would cut their taxes." On The View he likewise announced, "First of all, I don't want higher taxes, I have to pay taxes, and it's no fun. You know I think sometimes there's this presumption that Democrats, we just love taxing people. No, I would prefer to keep taxes as low as possible."

That sounds fairly promising. But the reality is different and McCain will need to bolster his communications effort to make sure voters understand that Obama voted to raise taxes 94 times and specifically to raise income taxes on those making as little as $31,850. Has Obama had a change or heart or is his voting record a reliable indicator of how he would govern if elected president?

Likewise on trade, Obama recently told a CNBC interviewer, "And on trade deals, I believe in free trade. And as somebody who lived overseas, who has family overseas, I've seen what's happened in terms of rising living standards around the globe. And that's a good thing for America, it's good for our national security." That is a far cry from what Obama now admits was "overheated and amplified" protectionist rhetoric he employed to beat Hillary Clinton in the primary.

And will Obama really disappoint his Big Labor supporters who he promised in a speech in April the following:

"But what I refuse to accept is that we have to sign trade deals like the South Korea Agreement that are bad for American workers. What I oppose -- and what I have always opposed -- are trade deals that put the interests of multinational corporations ahead of the interests of Americans workers -- like NAFTA, and CAFTA, and permanent normal trade relations with China. And I'll also oppose the Colombia Free Trade Agreement if President Bush insists on sending it to Congress..."

This, after all is the candidate who declared "Well, I don't think NAFTA has been good for America -- and I never have."

And on fiscal restraint, Obama again sounds downright responsible when he declares "We account for every single dollar that we propose." However, independent fact checkers point out that Obama hasn't come close to specifying the revenues he wants to raise and the amounts he plans to spend. David Brooks explained that there is just not enough money to pay for all his domestic wish list by simply soaking the rich. Brooks wrote in April:

"Both [Obama and Clinton] promised to not raise taxes on those making less than $200,000 or $250,000 a year. They both just emasculated their domestic programs. Returning the rich to their Clinton-era tax rates will yield, at best, $40 billion a year in revenue. It's impossible to fund a health care plan, let alone anything else, with that kind of money. The consequences are clear: if elected they will have to break their pledge, and thus destroy their credibility, or run a minimalist administration."

Again, it will be up to the McCain camp to explain this to voters who may be taken in by Obama's reasonable, but fallacious, rhetoric.

Obama has even been softening his language on corporate taxes. He told the Wall Street Journal in June that he would be open to reducing corporate tax rates. But it is unclear whether he really means it. Just a couple of months ago he told Tim Russert on Meet the Press that planned reductions for corporate taxes were "the exact wrong prescription for America."

It should come as no surprise that Obama is abandoning ultraliberal positions on the economy. As on a host of other issues from Iraq to the Second Amendment to campaign financing Obama is shifting ground on pocketbook economic issues as he enters the general election race. While conservatives may roll their eyes in disbelief, the newer Obama who sounds more moderate on the economy may present an attractive portrait, especially to key independent voters.

It will be up to the McCain team to probe whether this newest incarnation of Obama is merely a facade and to explain that Obama did not gain his rating as the most liberal member of the U.S. Senate by osmosis. How successful McCain is in bursting the bubble of the new and improved Obama will, in large part, determine who wins the election.

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