–President Obama, Governor Romney Differ On Formula For Fixing Deficit
–Obama Repeats Call For ‘Balanced’ Approach W/Spending Cuts and Revs
–Romney Says Spending Cuts, Econ Growth Only Options, Rules Out New Rev

By John Shaw

WASHINGTON (MNI) – The debate this week between President Barack
Obama and Republican presidential nominee Mitt Romney underscored the
sharply different approaches to fiscal policy that continue to dominate
the two parties.

It remains unclear if the Democratic and Republican parties fully
embrace their respective budget talking points or will be ready to show
flexibility in budget negotiations that are expected after the Nov. 6
elections.

Budget experts say the first presidential debate did not provide
any evidence of a coming compromise.

“I heard nothing that was conciliatory on fiscal policy,” said Stan
Collender, a budget expert at Qorvis Communications.

“I heard nothing that shows any flexibility by either party. I
heard nothing that suggests to me that next year’s fiscal negotiations
will be any more productive than this year’s budget debate or last
year’s, negotiations,” he said.

Bob Bixby, executive director of the Concord Coalition, said the
presidential debate was full of conflict and contention, but did little
to clarify how the two candidates view the precise nature of the U.S.’s
fiscal policy challenge.

“Debates are about emphasizing differences so it’s not surprising
that Romney and Obama tried to highlight their differences,” said Bixby.

“But not only did they seem to be inhabiting difference universes
when it comes to fiscal issues, Obama and Romney seemed to be using a
totally different set of facts — and ‘facts’ that were presented with
no context or explanation,” Bixby said.

Bixby did find one area of striking agreement between Obama and
Romney.

“Neither candidate gave the impression that anyone would have to
give up anything to fix our fiscal problem,” Bixby said.

During the debate, Obama repeated his call for a “balanced”
approach to future deficit reduction, mixing spending cuts and revenue
increases.

“I worked with Democrats and Republicans to cut $1 trillion out of
our discretionary budget,” Obama said in reference to the 2011 debt
ceiling talks.

“That’s the largest cut in the discretionary domestic budget since
Dwight Eisenhower. Now, we all know we need to do more. And so I’ve put
forward a specific $4 trillion deficit reduction plan,” Obama added.

Obama said he has offered a budget that has a 2.5 to 1 ratio of
spending cuts to revenue increases. Budget experts say this is true only
if one includes about $1 trillion in savings that it claims by drawing
down the wars in Iraq and Afghanistan.

The president assailed Romney’s tax plan which calls for reducing
the tax rates of all Americans by 20%, saying it would slash revenues by
$5 trillion over a decade. This estimate comes from a study by the Tax
Policy Center.

Romney said this report was biased and inaccurate. However, earlier
in the campaign the Romney team praised the research by the same think
tank as credible and authoritative.

The Committee on a Responsible Federal Budget, in a debate fact
checking paper, said Romney’s plan would reduce revenues by $5.1
trillion — a $3.8 trillion tax cut for individuals and $1.3 trillion
tax cut for corporations.

“I’m not looking to cut massive taxes and to reduce the revenues
going to the government. My number one principle is there’ll be no tax
cut that adds to the deficit,” Romney said during the debate.

Romney said cutting the budget deficit requires a mix of spending
controls and economic growth. “You never balance the budget by raising
taxes,” he said.

Romney also said that he would “absolutely” decline any deficit
reduction package that included new revenues by raising taxes.

Romney said he supports cutting back on the more than $1 trillion
in annual tax expenditures, but did not identify any specific one which
he would eliminate. He did say that he might support a cap on tax
deductions for individuals at $25,000 or $50,000 but offered no specific
plan.

“Budget-related issues got plenty of airtime in the first debate.
However, the candidates will need to break new ground in order to pay
for their fiscal promises,” the Committee for a Responsible Federal
Budget said at the conclusion of its fact checking report.

** MNI Washington Bureau: (202) 371-2121 **

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