Economy is top priority for Obama, McCain, and voters

Presidential candidates have very different views on how to handle taxes, jobs, home foreclosures, and fuel prices.

from the June 10, 2008 edition

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He wants to tie trade to overseas labor and environmental standards, opposes a gas tax holiday, and backed the recent farm bill. His healthcare plan mandates coverage for children, offers subsidies to lower-income Americans, and requires employers who don't offer coverage to contribute to a public health plan.

Both McCain and Obama support some form of government action to stem the mortgage crisis. But economists say their broader economic agendas deviate little from Republican and Democratic playbooks. Despite his one-time opposition to the Bush tax cuts, McCain is now in many ways "a pure small-government conservative – deregulate, privatize," says James Galbraith, an economist at the University of Texas at Austin.

Obama, for his part, "seems to be a standard leftist New Deal-type Democrat," says Harvard economist Robert Barro. "He mostly wants to redistribute income from the rich to the poor."

Economists say that neither candidate has explained in enough detail how they would fund their proposals. Obama says he would raise money by taxing the wealthy and ending the Iraq war, while McCain would save $100 billion a year by ending pork-barrel Congressional spending. Many analysts see those plans as insufficient or politically untenable.

"The ways in which the candidates say they would pay for spending increases or tax cuts are not really credible," says Roberton Williams of the nonpartisan Tax Policy Center in Washington.

In choosing a president, voters are swayed less by their own pocketbooks than by their views of the national economic picture, says Garrett Glasgow, a political scientist at the University of California, Santa Barbara. And when times are bad, the incumbent president – and his party – tend to get the blame.

Voters now rank the economy as their top election issue, and according to a Gallup poll last week, more than 80 percent see the economy as worsening. That helps Obama. In a recent Pew Research Center poll, 51 percent of voters said they saw him as best able to improve the economy, compared with 36 percent for McCain.

"The shaky state of the national economy is going to be a problem for John McCain," Glasgow said via e-mail. "McCain will want to paint an optimistic picture and also try to distance himself from the current administration on economic policy. He'll probably do this by trying to convince voters that national security" – on which the Vietnam War hero enjoys higher ratings – "is the biggest concern facing the nation."

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