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Hoping for Nothing New in Obama's Speech

President Obama will give a major economic policy speech in Cleveland on Thursday and the Republicans are already out with their spin: "No new ideas." That is almost certainly true. Obama is unlikely to introduce major new initiatives: He will simply be reminding people of his approach to economic policy and how it differs from Romney's.

But it’s a reminder we very much need. As I think conservatives would surely agree, the contrast between Obama and Romney is sharp and significant. I’m not sure the public quite grasps that yet.

You can see it clearly in the way the two men propose to bolster growth and create jobs. Obama’s approach is to boost spending in the short-term, through a combination of public works projects, targeted tax breaks, and aid to state and local governments. It’s everything from rebuilding schools and saving the jobs of public employees to offering targeted tax credits that should, in theory, encourage businesses to hire more workers.

Broadly speaking, its similar to the Recovery Act—a law Romney and his allies routinely dismiss as a “failure,” because the new spending temporarily increased deficits, but that the vast majority of economists believe created or saved many jobs. (A better criticism is that it didn’t spent enough.) At the same time, Obama has proposed a series of deficit reduction measures, the most recent of which (his latest budget) would stabilize deficits at least for the next decade—not enough to solve the country’s long-term fiscal problem, but enough to make good progress.

Romney’s approach is very nearly the opposite. He eschews spending of any sort: He is not the least bit interested in using taxpayer dollars to speed up school repair work, even though schools need it, or to save the jobs of teachers, firefighters, and other public employees. On the contrary, the downsizing of the public sector that most economists believe has slowed the economy, at least in the short run, is one that he celebrates and one that his allies, who have blocked spending in Congress, were primarily responsible for causing.

Romney says his intention is to cut spending even more, reducing deficits and reducing taxes. It’s not clear how he’d accomplish all of this—budget experts analyzing his commitments suggest the numbers don’t add up, meaning he’d have to sacrifice some of those goals. What is clear is that he has no specific plan for boosting growth in the short term: He is relying on expectations of lower deficits in the future—expectations, again, that are hard to square with what he’s actually proposing—to create jobs now. Even some conservative economists wonder why Romney hasn't proposed anything designed to boost growth in the short term.

This contrast isn’t simply about how to boost economic growth. Obama believes every American should have access to affordable health care: He would preserve Medicare, which makes that guarantee to the elderly, and implement the Affordable Care Act, which offers that guarantee to the non-elderly. His strategy for reducing health care spending is to apply moderate pressure on the system from all sides, while making sure all people retain basic protections.

Romney would repeal the Affordable Care Act, scale back the coverage Medicaid already provides to the poor, change the tax treatment of health insurance in ways that weaken employer-coverage, and turn Medicare into a voucher scheme. It’s the same approach as House Budget Chairman Paul Ryan advocates and, combined with Romney’s commitment to cap federal domestic spending at 16 percent of GDP, would reduce government spending by putting a greater burden on individuals—and would result in dramatically less financial protection from illness than Americans enjoy right now. As Ed Kilgore has observed at the Washington Monthly, it’s not “repeal and replace.” It’s “repeal and reverse.”

Tens of millions of Americans would likely lose insurance, or end up with weaker coverage, according to some (very) credible estimates. 

Obama thinks tax rates on wealthy Americans should go back up to what they were during the Clinton era, or at least close to that level. Romney wants to cut taxes in ways that will benefit the rich disproportionately. Obama believes in more regulation of Wall Street, for example. Romney believes in less. And, of course, the distinctions go beyond economics. Obama thinks climate change is a crisis, one that threatens the planet and demands a government response. Romney is not interested in climate change, except insofar as it means subsidizing innovation from the energy sector.

New material? Eh, the old material is just fine. Obama's task today, and for the rest of the campaign, is to remind voters that they face a distinct choice in this election—and to make sure they appreciate just how much is at stake.

follow me on twitter @CitizenCohn