Ten Miles Square


October 03, 2012 11:06 PM Real October Surprise Is Obama and Romney Agree

By Ezra Klein

In heated elections like this one, there is a tendency in the U.S. to characterize the arguments between the two candidates as much more momentous — world- historical, even — than they actually are.

It’s exciting to be the party of free enterprise battling the forces of socialism. It’s flattering to think of yourself as a patriotic American running against a cosmopolitan internationalist. It’s useful to convince your donors that you believe in businessmen like them while your opponent believes only in government.

Conversely, it’s kind of boring to think of yourself as having a set of technocratic disagreements with the opposition. Yet, for the most part, that’s what this U.S. presidential election is about.

One of this year’s more amusing “Ideological Battle of the Century!” poses was recently adopted by Mitt Romney, the Republican nominee.

“There’s a tape that came out just a couple of days ago where the president said yes he believes in redistribution,” he said. “I don’t.”

Romney supports Medicare and Medicaid, as well as food stamps, Social Security and welfare. As governor of Massachusetts, he passed a health-care-reform law that subsidized insurance coverage for his state’s poor.

Romney, in other words, fully believes in redistribution. He just prefers a bit less of it than President Barack Obama. Saying otherwise might sound “severely conservative,” but it’s not actually true.

Percentage Points

A similar dynamic is evident on taxes. Obama’s budget
proposes raising taxes to equal 19.8 percent of gross domestic
product by 2022, a share of the economy that’s closer to tax
policy under the last Republican administration than the last
Democratic administration. Obama would keep most of the Bush tax
cuts. Romney, by contrast, says he wants taxes at 18.75 percent
of GDP by 2022. There is a genuine question about whether that’s
achievable given the rate cuts Romney has proposed, but in
theory, at least, the difference between the two candidates is
about a percentage point of GDP annually.

Over time, that’s a difference of trillions of dollars. In
terms of the kinds of support the government can provide to the
elderly and the poor, and the kind of military we can afford, it
matters. It doesn’t, however raise huge philosophical questions.
And after negotiations with Congress and the inevitable
reckoning between Romney’s plan and political and fiscal
reality, the two plans would probably end up even closer.

This year’s campaign did present a few opportunities for
ideological cleavage. Take health care. Although Obama’s plan is
based on Romney’s reforms in Massachusetts, Republicans loathe
it. Romney had an opening to endorse what many conservatives
truly believe: It’s simply not the government’s role to help
Americans gain access to health care. But Romney has never said
anything of the kind. Instead, he has framed his opposition to
Obama’s plan as a technocratic disagreement over whether you get
better health outcomes through federal or state policies.

The government’s role in job creation offered a similar
opportunity for a decisive philosophical break. Democrats and
Republicans have long thought that the federal government can —
and during recessions should — create jobs through direct
spending and tax cuts. Since the 2008 financial crisis, however,
Republicans have increasingly questioned the logic and
legitimacy of such Keynesian stimulus. On the stump, Romney has
echoed that view. “Government doesn’t create jobs,” he said.
“It’s the private sector that creates jobs.”

Keynesian Response

But when asked if he would balance the budget in his first
year as president, Romney gave an answer worthy of John Maynard Keynes himself.

“If you take a trillion dollars for instance, out of the
first year of the federal budget, that would shrink GDP over 5
percent,” he told Time magazine. “That is by definition
throwing us into recession or depression. So I’m not going to do
that.” Similarly, he criticized Obama’s defense cuts in an ad
saying reduced Pentagon spending would “eliminate hundreds of
thousands of jobs.”

Across the aisle, Obama continues to support additional
stimulus, but his campaign has been emphasizing a package of tax
increases and spending cuts to reduce deficits — not stimulus
plans. So the campaigns don’t disagree about whether government
spending can create jobs or about whether we should be pivoting
to deficit reduction.

On financial regulation, the Obama administration and the
Romney campaign have both resisted calls for root-and-branch
reforms such as breaking up large banks. Instead, Obama signed
the ameliorant Dodd-Frank Act. Although Romney opposes Dodd-
Frank, he has been vague about his objections to the law and
emphatic in support of broadly similar regulations.

Even the single largest policy difference between the two
candidates — Romney’s proposed cuts to low-income programs like
Medicaid — is fundamentally a technocratic argument. Romney and
his team contend that giving states control of Medicaid would
produce huge savings and better care. The Obama administration
(and most policy experts) is skeptical on both counts. Here
again, the argument being made isn’t about whether we care for
the poor, it’s about how we do it.

I don’t mean to play down the very real differences between
the two campaigns. How much we spend, what we spend it on and
who pays for it are all very consequential. But American
politics operate atop a fairly firm and broad understanding
about the proper scope of the state. Partisanship often obscures
that fact, in part because the party out of power has reason to
exaggerate disagreements with the governing party. Yet behind
the boisterous partisan stage is a quieter arena where broad
consensus reigns. Whether it’s a good consensus is, of course,
another question.

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Ezra Klein is a columnist for Bloomberg View.


  • Oh my on October 05, 2012 9:18 AM:

    I had heard talk about how the esteemable Ezra Klein was in serious decline and becoming more and more a villager.

    Turns out that's not quite true. His transformation has already been completed.

    "Yet behind the boisterous partisan stage is a quieter arena where broad consensus reigns. Whether it’s a good consensus is, of course, another question."

    Seriously? The Republican party is currently undergoing one of the most radical shifts in 80+ years. It nominated a full bore crazy f*cker for VP who's already tried privatizing SS once and now has Medicare dead in his sites. We have a caucus of crazed T-nuts who took over the House and are scaring the bejesus out of establishment Republicans, and have shown absolutely or need for "consensus" or regard for established norms.

    One party wants to give more enormous tax cuts to the wealthy on top of the 2001 and 03 cuts that worked so well, completely disassemble every safety net, and wink wink "let" Israel kick-off another great overseas adventure that we'll just "have" to back them up on. And Ezra Klein is telling me that, other than a few percentage points, both parties are the same?

    So I guess we're back to 2000 and the "it doesn't really matter whether Gore or Bush is President" mentality.

    F*cking pathetic.

  • Robert from upstate on October 05, 2012 3:52 PM:

    A big 'Amen' for 'Oh My'.
    When the final accounting is done, some significant 'credit' for the almost complete dysfunction of the political institutions of the Federal government for the last 4 years will be allocated to the unwillingness of the 'village' to call out the completely irresponsible-some would say treasonous-actions of the Republican party, in thrall to its radical right wing and their puppet masters in industry and finance, to bring down the government. This piece of silly/stupid 'analysis' by E. Klein will be an exhibit supporting that accounting.

  • jewel on October 14, 2012 7:22 AM:

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  • clarence swinney on October 18, 2012 2:04 PM:

    Wants to cut taxes---35% to 28%--eliminate Estate Tax-- where one family owns as much Wealth as 90% of families—keep capital gains at 15%--where 25 Hedge Fund Managers made 22 Billion in 2010
    and paid the low 15% and less than 1% or zero in Payroll tax—offset revenue loss by closing loopholes
    Ha. Each loophole has proponents to fight for them—Increase military spending biggest waster of all—Our armies in 800 bases worldwide. We pursue bad trade agreements that allow unrestricted access to our markets. We cannot compete with $1 labor so watch our factories closing. 58,000 closed in last decade.

    We must demand better self serving policies. Tariffs on imports. High tax rate to pay down that horrid debt like 1945-1980 tax rates and tax on estates. The Middle Class has been hurt badly with loss of good paying jobs with benefits. Protect our safety nets which have served us well for over half a Century.

    Mitt is a rich mans candidate no spin can deny it. He will cut taxes for his rich pals and shred safety nets.
    This Man scares me very much. I do no trust his motives

  • clarence swinney on October 18, 2012 2:06 PM:

    Republicans 1980-2009 controlled Presidency for 20 years—Senate for 18 years-House for 12 years-6 years of total control
    In those 20 years our budget went to 3500 Billion from 600 Billion under Carter.
    Of course Clinton added a little of that 2900 increase.
    The Big 3 took Carter under 1000B debt to 10,000.
    Took Clinton surplus to a 1400B deficit. First time to exceed 1000B.
    Took Carter record job creation of 218,000 per month down to 99,000 per month.
    “Initiated” our involvement in 10 foreign conflicts. In 12, Carter + Clinton=0
    The Big 3 had recession in all or part of 7 years.
    The Big 3 destroyed our wonderful Savings and Loan Industry which was instrumental in the housing boom for Middle Class 1945-1980.
    The Big Three smashed our Housing Industry. !945-1980, it took 2.5 years of average income to buy an average size home to 5.4 years.
    The Big Three allowed Wall Street to Outsource entire Industries and in past decade close 58,000 plants. I can show plenty in my home town.
    The Big Three alienated 1500 Million Muslims by invading their destitute unarmed Iraq
    of only 15 million adults. What had those 15M done to us?
    The Big Three invaded a Muslim nation of 50% illiterates, third poorest nation and no arms.
    The Big Three allowed Wall Street Gamblers to turn into Casino Derivative Of America.
    The Big Three allowed Inequality of Wealth And making us #4 in OECD nations.
    The Big Three penchant for tax cuts for the richest made us #3 As least taxed in OECD just below Chile and Mexico.
    The Big Three allowed us to become #2 in OECD in least tax on corporations
    Want a BIG FOUR then elect Mitt Romney.
    Want to cut the minimum wage?
    Want to change Social Security and Medicare?
    Want to waste more on our overloaded wasteful killing machine empire?
    Want to invade Iran?
    A disgusted Independent