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MICHELE NORRIS, host:

And it's not just California.

Around the country, the collapsing housing market has been spreading to the rest of the economy. Last night, Florida voters said the economy is their number one issue. Just this morning, grim numbers show the economy slowed dramatically at the end of last year. The economy is leading the news, and it's a leading issue for the presidential candidates.

(Soundbite of past political speech)

Senator HILLARY CLINTON (Democrat, New York; Presidential Candidate): We have to stimulate the economy. I began calling…

Senator BARACK OBAMA (Democrat, Illinois; Presidential Candidate): We have not made the kind of progress that we need in having a balanced economy, and George Bush…

Mr. MITT ROMNEY (Former Governor Massachusetts; Republican Presidential Candidate): If you want to turn an economy around, the key thing is to...

Senator JOHN McCAIN (Republican, Arizona; Republican Presidential Candidate): ...economists thought that I could handle the nation's economy best.

NORRIS: NPR's Adam Davidson covers the economy. He's been talking with the economic advisors to the leading candidates. And let's first talk about mortgages, which Melissa Block heard so much about in California. Do the candidates address the mortgage crisis? Do they have specific plans?

ADAM DAVIDSON: All the candidates have at least used the word mortgage. They talk about mortgages. I think that on the Democratic side, there are more specific plans. On the Republican side, only Romney has really proposed a plan, and it's a relatively modest plan to extend the number of people who are able to qualify for certain federal help in times of crises. On the Democratic side, there really is a distinction between the way Senators Clinton and Obama approach it that tells you a bit about how they think about the economy. I think we have Senator Clinton talking about this.

Sen. CLINTON: I want to have a moratorium on foreclosures for 90 days so we can try to work them out. I want to freeze interest rates for five years, and I want to have a $30-billion package that will go in and try to stabilize the housing market and stabilize communities.

NORRIS: There, Senator Clinton talking about stabilizing communities, but foreclosure rates, we're told, are likely to increase with each quarter. What happens to this issue as we get closer to the general election in November?

DAVIDSON: If you trust the economic forecasters, this foreclosure issue is going to grow and grow. We're expecting March to have a whole lot of foreclosures because that's a month where there's a lot of these resets where people who are paying low interest rates will suddenly have to pay much higher interest rates, and a lot of people, we expect, will foreclose. What's ironic is by January 20th, 2009 when the next president is sworn in, there's a decent chance this issue will be resolved or nearing a resolution. But we can learn from how they talk about mortgages, how they think about the economy.

We heard Senator Clinton talking very specifically. When Senator Obama talks about it, there's less of that specificity.

Sen. OBAMA: We've got to open up bank branches; we've got to give people access to financing so that they're not going to a payday loan operation. I, two years ago, introduced a provision that would eliminate predatory lending, something that I had already helped to get past the state level.

NORRIS: Barack Obama, Hillary Clinton, do they have a very different economic philosophies?

DAVIDSON: Very different? No. Absolutely not. Their philosophies are pretty close to each other and pretty close to a sort of center-left Democratic economics of the last, say, 20 years. But within that, there are little differences. For example, Senator Obama, as a general rule, has what you might call a slightly more libertarian approach. He is for cutting taxes on poor and middle-class people. He is for eliminating tax cuts, certain tax cuts, on wealthier people, which is standard Democratic stuff. But he wants to get that money into the hands of the poor and middle class and let them decide how to spend it, which is a slightly more libertarian approach.

Senator Clinton is much more likely to say you should spend this amount on housing, you should spend this amount on savings, you should spend this amount on energy, you know, for lack of a better word, a slightly more left of center view, I would say, but only slightly.

NORRIS: Adam, let's now turn to the Republicans. John McCain, Mitt Romney, the two Republican frontrunners, how different are they?

DAVIDSON: Both of them, McCain and Romney, are battling hard to be the heir to Reagan, to say that their economic philosophy is the same as President Reagan's economic philosophy. Here's John McCain talking about it.

(Soundbite of past political speech)

Sen. McCAIN: I was there at the Reagan revolution. I was there when we enacted the first or just after we enacted the first tax cuts and restraints on spending.

DAVIDSON: So he's saying, I am the Reagan of the 21st century. I'm for cutting taxes, cutting spending. But here's Romney saying very similar things.

Mr. ROMNEY: I'm going to make sure that we straighten this country, and we do it the old-fashioned Republican way, the Ronald Reagan way of pulling together economic conservatives, social conservatives and foreign policy, national defense conservatives.

DAVIDSON: Now, the problem for both McCain and Romney is they have a pretty lousy record to prove that they truly are Reagan economic conservatives. Senator McCain has supported a whole host of things that folks who call themselves the heirs to Reagan the Republican economic conservatives really hate. McCain was for campaign finance reform. He voted against some of the tax cuts, including President Bush's tax cuts. He voted forced mandatory health care spending. These are kind of bedrock economic conservative issues where he was on the wrong side.

And of course, Mitt Romney, when he was governor of Massachusetts, endorsed a whole host of programs that economic conservatives really can't stand. So now, each one is sort of trying to outpace the other to be the standard bearer of tax cuts, spending cuts, old-fashioned Republican values.

NORRIS: We've been talking about the frontrunners, but I want to ask you, Adam, about Mike Huckabee. When he talks about the economy, it's often very personal, and from a voter's standpoint, it's almost situational.

Mr. MIKE HUCKABEE (Republican, Presidential Candidate): It may be doing great if you're at the top. But if you talk to the people at the bottom of the economy, the people who are handling the bags, people who are serving the food, you'd have a very different picture.

NORRIS: And it sounds like he has a very different prescription for the economy as well.

DAVIDSON: His tax plan is the single most radical idea of this whole election season, at least among the frontrunners, which is to completely eliminate income tax, completely eliminate the IRS, and the government to be funded almost entirely through sales tax. Now, for a whole host of technical reasons, I'd say the vast majority of economists and policy wonks say it's an unworkable proposal, but it certainly counts as the most radical and most unlike even President Reagan's vision for the economy.

NORRIS: I just want to ask you quickly, Adam, about Ron Paul and his economic philosophy.

DAVIDSON: If the other leading candidates live in a world, their economic world is a world we know, Ron Paul's is world we don't know. It has a much smaller federal government, even smaller than President Reagan's vision. It is a government that does not have any engagement with the outside world, except economic. We don't have military engagement with the outside world. In other words, this is a radically different world that we would live in. It's hard to say that about any of the other leading candidates.

NORRIS: NPR's Adam Davidson covers the economy. And if you want more information about the candidates and the issues, go to our website, NPR.org. Thank you, Adam.

DAVIDSON: Thank you, Michele.

NORRIS: And tomorrow on the program, we'll report on the candidates' positions on health care.

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