|By Jonathan Weisman and Anne E. Kornblut
Washington Post Staff Writers
Friday, February 15, 2008
WARREN, Ohio, Feb. 14 -- Hillary Rodham Clinton slammed Barack Obama
during an appearance at a General Motors plant here on Thursday for what
she charged was a lack of a record of achievement on the economy. But as
both Democratic presidential candidates announced comprehensive economic
plans this week, they advocated similar visions for what has become the
single biggest issue for voters in the 2008 campaign.
Clinton and Obama both promised that they would make the tax code more
middle-income-friendly and would protect consumers from threats --
including predatory credit card companies and rapacious college lenders.
Both candidates condemned corporate tax breaks that they say send jobs
overseas. Both pledged to protect homeowners and said they would repeal
President Bush's upper-income tax cuts while extending those for the
middle class. Both promised to rein in credit card companies that
arbitrarily raise interest rates, sending families into a downward
spiral of debt.
"I've been looking for ways to differentiate these two, and it hasn't
been easy," said Jared Bernstein, an economist at the liberal Economic
Policy Institute. This week's economic speeches do not "make it a whole
lot easier," he added.
Despite the similarities, Clinton, eager to generate positive news about
her campaign, went on the offensive during her tour of an automotive
plant. She sharpened her line of attack against Obama and what she
argues is his lack of substance. "Over the years, you've heard plenty of
promises from plenty of people in plenty of speeches," Clinton told a
group of factory workers. "Speeches don't put food on the table.
Speeches don't fill up your tank. Speeches don't fill your prescriptions."
She continued: "That's the difference between me and my Democratic
opponent. My opponent makes speeches. I offer solutions."
But even with the economy teetering on the edge of a recession and both
Democrats hoping to win union-heavy Ohio -- not to mention the
endorsement of former senator and rival John Edwards (N.C.) in the days
ahead -- neither Clinton nor, a day earlier, Obama swerved into an overt
populist appeal. Where Sen. John F. Kerry (Mass.) castigated "Benedict
Arnold CEOs" during his White House bid four years ago, Clinton and
Obama seem to be channeling the Bill Clinton of 1992.
"I won't stand here and tell you that we can -- or should -- stop free
trade. We can't stop every job from going overseas," Obama told GM
employees on Wednesday, just hours after the company offered thousands
of worker buyouts. "But I also won't stand here and accept an America
where we do nothing to help American workers who have lost jobs and
opportunities because of these trade agreements."
The relative restraint has been somewhat surprising, party economists
say. Ohio Democrats have been pushing them toward a harder edge,
especially on trade, but so far to no avail. "We want them to address
job losses, the outsourcing issue, renegotiating trade agreements and
the mortgage crisis," said Rep. Marcy Kaptur (Ohio). "But we're hearing
a lot of generalities."
The economic clouds are darkening rapidly. Federal Reserve Chairman Ben
S. Bernanke warned the Senate budget committee on Thursday that the
economic outlook has worsened, sending stock prices tumbling.
"They're operating in an environment where for the first time on record,
we could be going into a recession with household incomes actually lower
than they were the last time we were in recession," said Jason Furman, a
Brookings Institution economist who advised Kerry. "The economic
pressures are just that much greater."
Still, in choosing government as the tool to deliver health care,
protect consumers, and direct investment in energy and infrastructure,
both Democrats are setting up a general-election fight that will follow
a familiar partisan argument about what the size and scope of government
Said Sen. John McCain (Ariz.), the presumptive Republican nominee: "We
will have a spirited and respectful discussion of the issues, but,
believe me, I believe that I and my party, which is a center-right,
conservative outlook, both philosophically and in legislative action,
will prevail over the big-government, big-spending Democrats."
For Clinton, the new emphasis on the economy allowed her to push
policies Thursday that align with the core of her message -- that she
would help ordinary voters.
Her proposals are tailor-made for an industrial heartland hemorrhaging
manufacturing jobs and crippled by mortgage defaults and rising debt.
She would rescue the Manufacturing Extension Partnership, a
federal-local program for small manufacturers perpetually targeted for
elimination by Bush, and would immediately limit credit card interest
rates and stop credit card companies from raising those rates without
warning and from applying higher rates to old transactions.
She would also establish a Financial Product Safety Commission, similar
to the Consumer Product Safety Commission, to crack down on abusive
lending practices in the credit card, auto loan and mortgage markets.
To lower college tuition costs, Clinton said that she would crack down
on lenders that shower college financial aid officers with gifts, stock
options and trips in exchange for steering students to captive lending
Many of those plans mirror Obama's promises. To pay for some of them,
both candidates said they would eliminate tax breaks for companies that
send jobs overseas. The current corporate tax code allows companies to
defer taxes indefinitely on profits earned at facilities overseas. In
2004, Kerry proposed subjecting those earnings to taxation immediately
but using the proceeds to lower the domestic corporate income tax, a
plan designed to tack him to the economic center. Clinton and Obama see
no reason for such gestures of moderation.
Clinton did offer far more detail on how her initiatives would be
funded. She backed up her promise to invest tens of billions of dollars
in renewable energy technology by handing the bill to the oil companies.
They could either invest in renewable energy on their own or finance the
federal effort, largely funded by imposing real royalties on drilling on
public land and by repealing recent tax breaks.
Likewise, Clinton said she would end the "carried interest" loophole, a
quirk in the tax code that has allowed private equity and hedge fund
managers to pay tax rates of just 15 percent on millions of dollars in
income. Attempts to plug that loophole have also run into bipartisan
opposition from lawmakers flooded with Wall Street campaign cash. But
Democratic economists have been in a forgiving mood toward both candidates.
"There's definitely some hand-waving here," Bernstein acknowledged, "but
for people running for office, it's folly to ask precisely what they're
going to do and precisely how you're going to pay for it."