The Obama campaign is in a similar position. It might eke out a victory, but it is at risk of losing control of the economic narrative. Its best hope is to stop nickel-and-diming Mitt Romney and laundry-listing forgettable initiatives and, instead, give independents reason to think that Obama has a clear, viable plan to bolster the economy.
This election will be decided largely by independent voters, most of whom can probably tell you that Mitt Romney’s economic plan is to repeal Obamacare and shrink the government. It may not make much sense, but it’s clear. Ask what Obama’s plan is, and they won’t be certain. They will know, however, that what he has done hasn’t worked. And by the fall, many independents will have made up their minds.
The president’s failure, so far, to show that he understands the scope of the economy’s problems and knows how to fix them does not stem from having nothing to say: investment in education, energy, innovation and infrastructure are reasonable things. But they are also slow-acting, small-bore stuff. Such talk does not include additional economic stimulus, an element that many economists, especially Democratic-leaning ones, consider crucial to prevent a double-dip recession. Nor does it deal realistically with long-term growth in spending.
So Obama should draw a map and send it to Capitol Hill in the form of a bill — a president’s strongest statement that he intends action. A big legislative proposal can frame the issue and paint Obama’s intentions in bold colors. It should include three elements:
1) Long-term fiscal retrenchment. The easiest and best way is to adopt the Simpson-Bowles deficit plan. The Simpson-Bowles commission’s recommendations have been established as a credible bipartisan solution. Adopting its plan outright would signal that Obama is not playing partisan games and would redress the (justified) criticism that he has finessed the deficit. Not least, Simpson-Bowles compares favorably on grounds of balance, economic plausibility and public appeal with the budget of Rep. Paul Ryan (R-Wis.), which Romney endorsed.
2) Short-term economic stimulus. Republicans will howl about more spending. Let them. Stimulus measures make sense when unemployment is high and the world is teetering on the edge of a second recession. And provided they are coupled with a credible long-term retrenchment, they are politically and economically defensible. Such measures have a further political advantage: Obama and the Democrats would be running on what they believe is the right answer, instead of running away from it.
3) A two-year debt-limit extension. Declare that another debt-limit fiasco is unacceptable and demand that the issue be taken off the table. Let Republicans explain why they want to hold a gun to the economy’s head.
Could Obama get something like this enacted before Election Day? Of course not. Could he even get it voted on? Possibly. Would he be justified in putting the package before Congress and demanding action? Absolutely. Doing so would show that he knows the economy is in trouble, that he believes the status quo is unacceptable and that he is determined to act.
One other advantage: Setting forth a boldly enunciated, easily graspable program puts Obama in a stronger position to criticize Romney’s plan as dangerously contractionary. Instead of going for Romney’s capillaries (his years-old record as governor; his even-older record at Bain Capital), Obama could go for the jugular by drawing a contrast that should be at the campaign’s core: The Republicans’ mistimed, precipitous austerity threatens to bring on another recession.
Obama could attempt to squeak through the election with a campaign modeled on, ironically, that of George W. Bush in 2004. Bush sowed just enough doubt about his challenger, and managed to pick off just enough swing voters in key states, to eke out victory. Obama is doing something like that now.
But the economic head winds Obama is fighting are much stronger than those faced by Bush, and his approval ratings are lower. In any case, a narrow victory based on electoral salami-slicing and negative advertising would leave Obama without a clear mandate or agenda for his second term. Ask Bush how that works out.
Time is short, Mr. President. Carterdom beckons.