Clinton and Obama on Economic Policy
Two recent New York Times articles, two weeks apart, provide important insights into how Senators Clinton and Obama describe the nation’s economic priorities and the role of government in the economy.
In this January 21 Times article, Senator Clinton makes clear she is focused on the need to reverse the excesses of the Bush economic and tax policies:
. . . Mrs. Clinton put her emphasis on issues like inequality and the role of institutions like government, rather than market forces, in addressing them.
She said that economic excesses — including executive-pay packages she characterized as often “offensive” and “wrong” and a tax code that had become “so far out of whack” in favoring the wealthy — were holding down middle-class living standards. . . .
“If you go back and look at our history, we were most successful when we had that balance between an effective, vigorous government and a dynamic, appropriately regulated market,” Mrs. Clinton said. “And we have systematically diminished the role and the responsibility of our government, and we have watched our market become imbalanced.” . . .
She added: “I want to get back to the appropriate balance of power between government and the market.”
. . . She would roll back the Bush tax cuts for households with incomes over $250,000 while creating more tax breaks below that threshold; impose closer scrutiny on financial markets, including the investments being made by foreign governments in the United States; and raise spending on job-creating projects like the development of alternative energy. . . .
Her first priority, she said, would be changing the tax code. She has proposed tax credits for college tuition, retirement savings, health care and alternative energy use, most of which would go to lower- and middle-income families. She would also raise the top marginal rate to 39.6 percent, its level for much of her husband’s administration. Increasing high-end tax rates would bring in $52 billion a year, her campaign says, and help pay for some of her other proposals.
“It’s shocking that there is such a continuing political pressure to lower tax rates on the wealthy, when so much of what we look back on now with nostalgia and pride,” she said, referring to the decades immediately after World War II, “was at a time when those who were well off were paying a significantly higher percentage of their income.”
The equivalent article on Senator Obama appeared on February 2. Note the similarities:
If elected, Mr. Obama said he would to try to forge a popular mandate for policy changes that could reverse a generation of slow wage growth and outlast any one administration. At the top of his list would be shifting the tax burden more toward the wealthy and making investments — in health care, alternative-energy research and education — that would cost a significant amount of money but could ultimately lift economic growth. . . .
“We have to disaggregate tax policy between the wealthy and the working class or middle class,” he said. “We have to be able to say that we are going to at once raise taxes on some people and lower taxes on others.”
He added: “This has been one of the greatest rhetorical sleights of hand of the Republican Party, and it has been a great weakness of the Democratic Party.”
He has called for shoring up Social Security by raising payroll taxes on very high earners, while she has not. He also favors a permanent tax credit of up to $1,000 for families in the bottom 90 percent or so of the income distribution, which makes his package of middle-class tax credits significantly larger than hers. . . .
Either way, the Obama program clearly emphasizes help for the middle class — through tax cuts and new programs — more than deficit reduction. His approach puts him somewhat to the left of the [Bill] Clinton administration but broadly in line with the Democratic Party now.
Indeed, Mr. Obama and Mrs. Clinton hold similar or identical positions on a host of economic issues, and Democratic economists not aligned with either campaign often speak positively about both.
The second article argues there are differences in how each would govern, and thus approach economic solutions, but it’s also possible these are more about how each can get elected, given who they are, not how they’d actually govern. And after yesterday’s expose, it’s hard to argue that either would be more or less susceptible to opposition or influence from powerful economic interests.