Obama's Jobs Plan Versus GOP Rivals' Plans

President Obama and two GOP presidential hopefuls have laid out their ideas to turn the economy around. NPR's Scott Horsley joins Robert Siegel to compare and contrast the plans.

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ROBERT SIEGEL, host: From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MELISSA BLOCK, host: And I'm Melissa Block. President Obama traveled to Richmond, Virginia, today to promote his new jobs plan. He says the $447 billion package of tax cuts and spending would immediately lift the sagging economy.

President BARACK OBAMA: It will create more jobs for construction workers, more jobs for teachers, more jobs for veterans, more jobs for young people.

SIEGEL: President Obama is not alone in offering a jobs plan. Two of his Republican challengers for the White House recently released their own proposals, Mitt Romney and Jon Huntsman. And to compare these economic blueprints, we're joined now by NPR's Scott Horsley. And first, Scott, easy enough to say the president and his GOP rivals don't see the problem the same way.

SCOTT HORSLEY: No, they offer very different diagnoses of what's wrong with the economy, so not surprisingly, they have very different prescriptions for how to fix it. For President Obama, the basic short run problem is just a lack of demand. You know, since the collapse of the housing bubble, consumers aren't buying like they used to, so businesses aren't hiring. That makes consumers nervous and you get into this downward spiral. The classic Keynesian remedy for that is for the government to step into the void and prime the pump so you get more demand, more hiring and try to reverse the cycle.

And that's why last night, before that joint session of Congress, Mr. Obama proposed more than $100 billion in new public works projects for - that's government spending and those payroll tax cuts to put more money in worker's pockets. Let's take a listen.

OBAMA: It will provide a jolt to an economy that has stalled and give companies confidence that if they invest and if they hire, there will be customers for their products and services. You should pass this jobs plan right away.

SIEGEL: That's the president's diagnosis and prescription. What do the Republicans see as the problem with the economy?

HORSLEY: Well, Republicans say businesses would be hiring right now if they weren't weighed down by the fear of future taxes and government red tape. Here's Mitt Romney, the former governor of Massachusetts, rolling out his jobs plan in Nevada earlier this week.

Governor MITT ROMNEY: If I'm in the White House, the first thing I'm gonna do on day one is say, all those regulations that were put in place by President Obama - and by the way, his rate of adding regulations is about four times greater than President Bush's was. So all those policies, all those regulations he put in place, I'm gonna stop in their tracks.

HORSLEY: I should note, Robert, we checked that figure with the Romney camp today, and they say the Governor misspoke. The actual pace of regulations is only double what it was in the Bush years. And they based that on a study by the conservative Heritage Foundation.

But this is something you hear a lot from Republicans, both in Congress and on the presidential trail, that excessive government is the problem. You know, in Texas Governor Rick Perry's book, "Fed Up," he offers a scathing critique of the New Deal and writes that the Great Depression ended with World War II only when, quote, "FDR was finally persuaded to unleash private enterprise." That's a curious reading of history to suggest that World War II was somehow driven by private enterprise.

During the war years, federal spending topped 40 percent of the total U.S. economy, dwarfing anything we see these days. But this is kind of the guiding principle of Republican economic policy these days, that the best thing for government to do is to simply get out of the way.

SIEGEL: Now, of course, another big area where the Republican candidates would like to see less government is they'd like to see lower taxes.

HORSLEY: That's right. Tax reform is a big part of both Mitt Romney's proposal and former Utah Governor Jon Huntsman plan. Here's Huntsman in New Hampshire last week.

Governor JON HUNTSMAN: Rather than tinker around the edges of what is a broken system, I'm going to drop a plan on the front steps of the capitol that says, we need to clean house. Get rid of all tax expenditures, all loopholes, all deductions, all subsidies, all corporate welfare. Use that to lower rates across the board and do it in a revenue neutral fashion.

HORSLEY: Now, pretty much everybody agrees that we need to simplify the tax code. President Obama will probably propose something similar when he unveils his tax plan the week after next. When Huntsman says he wants it to be revenue neutral, though, that means he's not counting on any additional tax revenue to help bring down the deficit. That's a distinction President Obama is. Now, Huntsman also wants to eliminate the tax on dividends and capital gains to encourage investment, that'd be a big windfall for wealthy Americans.

Romney also wants to eliminate those investment taxes, but only for middle class taxpayers.

SIEGEL: Now, are there any areas where the Republicans and the president actually agree?

HORSLEY: There are. All of them stressed the need to boost exports and promote free trade, although Republicans say Mr. Obama hasn't moved fast enough in that area. And they all stressed the importance of a more educated workforce as the global economy gets more and more competitive. Mr. Obama told students in Richmond today, I know you're having fun here at the university, but you've gotta hit the books.

SIEGEL: Thanks, Scott.

HORSLEY: My pleasure, Robert.

SIEGEL: That's NPR's Scott Horsley speaking with us from the White House.

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