Stark differences in candidates’ economic plans

By Edmund L. Andrews

updated 12:01 a.m. ET Jan. 15, 2008

WASHINGTON - For Democratic presidential contenders, the growing risk of a recession is an opportunity for action. For Republican contenders, accustomed to calling for less government intervention, it presents a dilemma.

In the last several days, the leading Democratic rivals have rushed out proposals to spur the economy with one-time tax rebates, expanded unemployment benefits, money to prevent home foreclosures and assistance for state and local governments.

Senator Hillary Rodham Clinton of New York has proposed $70 billion in emergency spending programs, with an additional $40 billion in tax rebates if the economy worsens. Senator Barack Obama of Illinois has a $75 billion plan based largely on immediate tax rebates of $250 to most workers to encourage consumer spending.

John Edwards put out a plan last month proposing more money for unemployment benefits, energy projects and a “home rescue fund” for people in danger of losing their houses.

GOP sticks with small-government message
By contrast, the leading Republican candidates are much more skeptical about short-term government rescues.

Even as they campaign in Michigan, where the automobile industry is depressed and unemployment is high, most Republican candidates are sticking to their existing proposals for lower taxes and less regulation.

The Republican presidential candidates have been more skeptical about short-term stimulus measures than President Bush has been. Mr. Bush signaled last week that he would propose a package of measures, probably dominated by tax cuts, in his State of the Union address on Jan. 28.

The debate among candidates about stimulus measures is largely academic, because economic conditions are almost sure to be entirely different by the time a new president takes office a little more than a year from now.

Different approaches
But the debate shows big differences, even between candidates in the same party, in how the rivals would approach economic problems.

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Among the Republicans, Senator John McCain has a proposal to abolish the alternative minimum tax, a move that would save taxpayers $1 trillion over the next decade but would have little impact in the next year.

Mitt Romney, the former governor of Massachusetts, campaigning in Michigan, promised on Monday to push for a fivefold increase in spending on energy and automotive technologies.

But Mr. Romney has said little about any emergency measures to fend off a broader recession this year. Instead, he promised long-term measures to overhaul the tax code and said he would fight new regulations, including tougher fuel-economy requirements for cars and trucks that Congress recently passed and Mr. Bush signed into law.

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