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Right Turn
Posted at 04:25 PM ET, 08/27/2012

Striking a balance between growth and fiscal sobriety

Since Rep. Paul Ryan (R-Wis.) joined the presidential ticket, Republicans have spent much of their time talking about Medicare and the debt. Part of this was a proactive strike at the Democrats, whom they knew would play the Mediscare card against Romney-Ryan.But in Tampa and beyond, look for the Republicans to focus more intently on the five-prong Romney plan for recovery.

Conservative supply-siders firmly believe that it was Ronald Regan’s growth message that lifted him to victory in 1980 and was the key to Reagan’s success. Last week, the quintessential pro-market, pro-growth Republican, Larry Kudlow, wrote: “I hear and read some grousing from conservative supply-side colleagues that Ryan is no longer the Jack Kemp, supply-side-growth guy he once was. Instead, they say he has become a root-canal Republican who obsesses about entitlement debt bombs and deficit reduction. They say he’s wedded to the Congressional Budget Office in a kind of budget-austerity, Stockholm syndrome. The whisperers say this happened to David Stockman years ago at OMB. Now they say it’s happening to Ryan at the head of the House Budget Committee.”

Kudlow concludes that this fear is unfounded, pointing to his own interview with Ryan.

Indeed with the roll-out of Mitt Romney’s energy policy there seems to have been a conscious effort to refocus on jobs and a more optimistic, forward-looking message. Ryan campaigning in his home state hit that theme today in which he focused on the Republican alternative: “We’ve seen what the president has offered. We have seen the path he has placed us on. It’s a nation in debt. It’s a nation in doubt. It’s a nation in decline. Or we can choose a better path, reapply those founding principles, reclaim the American idea and get people back to work and get the American idea of prosperity and an opportunity society back on track. And that’s exactly what we are going to do.”

The increased focus on growth is music to the ears of many fiscal conservatives. Grover Norquist of the Americans for Tax Reform tells me that in general Democrats “want to talk about anything other than the economy.” He says Republicans do far better when they “focus on both pro-growth tax and regulatory cost reductions and reforming entitlement.” In short “reform” to reduce costs rather than simply cut, cut, cut is a more effective policy and message for conservatives.

Other conservatives think part of the problem is with the media filter that resists the idea that growth is the way to reduce the debt. Barney Keller of Club for Growth e-mails, “The liberal media simply refuses to accept the fact that if you pass tax reform and lower rates, as Romney generally has proposed, it will lead to increased economic growth, which creates wealth and prosperity for everyone. Thus, in nearly every campaign, they present the false choice between cutting spending and raising taxes to their readers, which is exactly what’s happening here.” He adds, “We’ve often encouraged Governor Romney to be bolder in his policy proposals and run on them, because we believe that voters respond to candidates that clearly articulate the pro-growth message like Marco Rubio or Pat Toomey, but that’s up the candidate and his advisors, not us.”

In short, Romney-Ryan must balance their message. Many independents are dissatisfied with President Obama precisely because of the debt and the uptick in domestic spending. However, exclusively focusing on a budget cutting message leads to a less positive, less jobs-oriented message. If Romney and Ryan are successful in the convention, they will show the relationship between fiscal discipline and growth: The debt acts as a drag on growth, while increased growth and job creation will increase federal coffers and reduce reliance on federal programs. Conservative economist Doug Holtz-Eakin told me in a brief phone conversation today, “The two are closely related. If we are sailing toward a fiscal cliff that’s not good for growth.” As a matter of message however he thinks “first and foremost” voters want to hear about jobs and their own pocketbooks. As part of that Holtz-Eakin says Romney’s energy policy is key. “It’s a big, important part of the economy he emphasizes.”

The Republicans’ economic message is not simplistic, but it is a necessary one to keep both budget hawks and pro-growth Republicans as well as independents on board. That requires however a strong, clear convention message that can grab voters directly.

By  |  04:25 PM ET, 08/27/2012

Categories:  2012 campaign, Economy

 
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