On some things, virtually all the Republican presidential candidates agree: President Obama's health-reform plan must be scrapped. Government spending is far too high. Taxes should be lower. Washington needs to be reined in, and more power should devolve to the states.
But many differences remain, especially on how to create jobs and fix the economy. Rick Perry recently unveiled an economic plan meant to put him on a par with on-and-off front-runner Mitt Romney, whose own plan, a carryover from the 2008 presidential campaign, has been the baseline for much of the GOP debate over the economy. Comparing the two plans side-by-side helps clarify each candidate's distinctive views.
Romney, though he's loath to admit it, is an establishment candidate who's reluctant to shake things up too much and mindful of the consistent and predictable economic climate that businesses appreciate. That's not surprising given that Romney spent most of his private-sector career in the financial industry, running private-equity firm Bain Capital, which bought, sold, and helped run dozens of businesses while Romney was there. That makes Romney corporate America's favored candidate--a huge help with fundraising.
Perry, by contrast, seems to be trying to accomplish two things with his plan. First, he's staking out Tea Party turf by endorsing many positions backed by the GOP's rightward flank. Second, his flat-tax plan follows the lead of former pizza-chain CEO Herman Cain, whose 9-9-9 plan has resonated with voters thanks to its simplicity and its catchy, promotional ring. Perry says that filing taxes under his plan would be so easy it would take just a moment or two. And he now brandishes a hypothetical, postcard-sized tax form that gives the Texas governor a marketing gimmick of his own to woo voters with.
Romney and Perry have clashed on both style and substance in the GOP debates, and the arrival of Perry's economic plan now allows a deeper dive into the substance of their disagreements. Here's how the two candidates differ on 10 of the most important economic issues:
Income taxes. Romney would basically keep tax rates where they are, which means he would make the Bush tax cuts (extended by Obama) permanent instead of letting them expire on schedule at the end of 2012. He'd eliminate the estate tax and abolish capital gains taxes for those who earn $200,000 or less, while also proposing a long-term reform plan to lower rates and reduce exemptions. Perry would do much the same, while going a bit further by eliminating capital gains taxes completely. But he'd also allow taxpayers to opt out of the current scheme and instead pay a simplified flat tax of 20 percent, with a few basic deductions allowed. That, he says, would allow many people to avoid the expense of hiring tax preparers or stumbling through a thicket of tax rules.
Corporate tax. Romney wants to lower it from the current level of 35 percent to 25 percent. Perry would go further, lowering the corporate tax rate to 20 percent. Both would cut back on loopholes and tax breaks and equalize the tax rates on profits earned overseas, to bring more corporate cash back to the United States.
The national debt. Romney wants to cap federal spending at 20 percent of GDP, Perry at 18 percent. (It's now about 24 percent.) Both favor a balanced-budget amendment, although that seems unlikely to ever become law and would take years if it did. Neither man, however, has detailed the deep spending and entitlement cuts that would be required to force down federal outlays by so much. So both get an incomplete on this assignment (as does Obama).
Bailouts. Perry's economic plan declares that the 2008 bank bailouts were "wrong," and he insists there should be "no more bailouts" in the future. Romney has criticized the bailouts of General Motors and Chrysler but has been more circumspect about the bank rescues. That puts him closer to the mindset of many CEOs, who generally criticize Washington's deep role in the economy—but realize that recent government intervention has also saved a lot of corporate bacon.
Social Security. Both men have suggested gradually raising the retirement age and reducing benefits to wealthier retirees to help keep Social Security solvent. Perry would go a step further by giving younger people the option of investing their Social Security contributions in a personal retirement account, with the ability to invest the money as they wish. In one debate, Perry called Social Security a "Ponzi scheme" that Washington should transfer to the states. But his formal plan is more measured.
Medicare. Romney and Perry both generally support the idea of privatizing Medicare and giving seniors vouchers they could use to help pay for private insurance. But that would probably amount to more expensive coverage for most seniors, and neither man has detailed a full reform plan. Little wonder. Medicare is likely to require major changes to curtail skyrocketing costs, and be one of the most contentious issues of future elections. Few politicians facing a competitive election are willing to outline the detailed cuts—or tax increases—that will likely be necessary to keep this program intact.
Regulatory reform. Both men want to slash government regulations, but Perry would generally go further than Romney. He'd completely repeal the Dodd-Frank financial reforms, for example, while Romney would replace them with a "streamlined regulatory framework." Perry would also "dismantle" the Environmental Protection Agency, cut such funding by 60 percent, and repeal all clean-air rules enacted by Obama. Romney would relax environmental rules, but he hasn't attacked the EPA as Perry has.
China. Romney says that declaring China a currency manipulator would be a "day one" priority if he gained the White House. Perry's economic plan doesn't mention China, and as governor of Texas, Perry has benefited from Chinese firms, such as the telecommunications firm Huawei, opening U.S. branches in his state.
Energy. A big boost in domestic energy production is a keystone of Perry's economic plan. He'd ease the permitting process, cut back on other regulations, and allow oil and gas production in many areas now off-limits or carefully protected. Romney's ideas are similar, though slightly less aggressive. Both men favor more nuclear power.
The Federal Reserve. Perry's economic plan doesn't mention the Fed, but the Texas governor famously said that "printing more money"—shorthand for the Fed's quantitative-easing programs--is "almost treasonous," a view reflecting the attitude of many conservatives. Romney, by contrast, has offered faint praise for Fed Chairman Ben Bernanke, saying that he's "doing as good a job as he thinks he can do."