In what may be the nation's first referendum on competitiveness, the 13 presidential candidates offered a wide range of views on how to cure the nation's competitive ailments in a report released yesterday by the Council on Competitiveness.
"Competitiveness issues have captured the attention of a number of candidates," said Arthur Levitt Jr., chairman and chief executive officer of the American Stock Exchange and a member of the council's executive committee. "We want to see to it that the issue stays high on the agenda during the campaign."
The 109-page report was a compilation of candidates' thoughts on capital formation, human resources, international trade, and science and technology.
Though candidates' responses to a 17-item questionnaire and their written comments were as diverse as their personalities and platforms, there was agreement that deficit reduction is a priority. There was less of a consensus on how to achieve that goal, especially on the touchy issue of raising revenue.
A close second in priority was improving the nation's educational system and access to it. "They are giving serious attention to the need to upgrade human resource development, from kindergarten to work force retraining," said Levitt. "In fact, education may be the sleeper issue of the campaign."
Alan Magazine, president of the council, which includes representatives from business, labor and academia, said the group endorse neither the candidates' views nor the analysis of their positions that was provided by Pat Choate, vice president of policy analysis at TRW Inc., Lawrence Summers, professor of political economy at Harvard University, and Norman Ornstein, resident scholar at the American Enterprise Institute.
In that analysis, Choate said he was particularly struck by the strong thread of support "for increased accountability in every key sector: employer and employee, teacher and student, government and the private sector." Candidates divided along party lines on whether the federal government should play a larger role in civilian research and development efforts. A number of candidates said the nation's trade problems were a result of "inappropriate domestic economic policies," but there was a wide variety of ideas on the specifics of improving U.S. trade performance.
Though many of the candidates saw links between the issues that add up to competitiveness, the analysis included some criticism of responses on tough issues such as what role the United States will play in a global economy.
Ornstein said the sum of the responses did not give "much of a sense of stepping back and thinking about the broadest issues. That's a little disappointing." He said the good news was that candidates addressed specific issues such as trade with sensitivity "by not suggesting it's someone else's fault but a greater set of macroeconomic problems."
The diverse prescriptions that candidates offered for cutting the federal deficit were scrutinized by Summers and were found wanting.
"Their intentions were better than their arithmetic and the beef was not all there," Summers said.
Summers -- who believes major tax increases will be needed during the next administration -- said the candidate plans lacked not only "detailed blueprints, but broad outlines of policies that have the promise of reducing the budget deficit."
To make matters worse, many candidates appeared to take what Summers called the "ostrich" or "evasion" positions on the question of raising taxes to trim the deficit -- either opposing new taxes or "maybe raise some revenue from rich people."
Summers said the "striking note of candor and clarity is Bruce Babbitt's call for a national consumption tax."
Candidates' proposals on how to raise revenue and cut spending ranged from Babbitt's 5 percent national consumption tax and $20 billion in spending cuts to Bush's belief that lower taxes "keep America competitive."
If there was little agreement on how to solve the government's fiscal problems, there was a semblance of agreement on the issue of "human resource development" -- improving the educational system, ensuring access to higher education despite rising costs, and outlining the government's role in training American workers.
Candidates divided along more traditional party lines on the role of the federal government in funding research, development and specific efforts such as Sematech.
Levitt said Democrats advocated a larger role for the federal government in civilian research efforts, while the four Republicans who responded favored low tax rates or reducing government regulation. No Republican supported federal funding for Sematech, a research consortium aimed at assuring U.S. leadership in the manufacturing of semiconductors, the report said.
Some Republicans also seemed unconvinced as to the enormity of the competitiveness problem.
Jack Kemp said U.S. industry "may not be losing a battle of international competitiveness, but a chaotic international monetary system and a protectionist world-trading climate are preventing every nation from reaching its full growth potential in the world marketplace."
Pete DuPont acknowledged that "fundamental reforms" of some government programs and education would help make America more competitive. But he also said that "by most indices, the U.S. economy is in better shape today than ever before."