Washington Post

For part one, click here. Now, back to the transcript!

- How is Mitt Romney different from George W. Bush again? As of Tuesday, I assumed that Romney was waiting, hoping he'd get a chance, on national television, to cast the millstone of George W. Bush's presidency off the neck of his campaign and his party. And then he got that chance. And then he didn't really take it.

President Bush and I are -- are different people and these are different times and that’s why my five point plan is so different than what he would have done.

I mean for instance, we can now, by virtue of new technology actually get all the energy we need in North America without having to go to the -- the Arabs or the Venezuelans or anyone else. That wasn’t true in his time, that’s why my policy starts with a very robust policy to get all that energy in North America -- become energy secure.

Number two, trade -- I’ll crack down on China, President Bush didn’t. I’m also going to dramatically expand trade in Latin America. It’s been growing about 12 percent per year over a long period of time. I want to add more free trade agreements so we’ll have more trade.

Number three, I’m going to get us to a balanced budget. President Bush didn’t. President Obama was right, he said that that was outrageous to have deficits as high as half a trillion dollars under the Bush years. He was right, but then he put in place deficits twice that size for every one of his four years. And his forecast for the next four years is more deficits, almost that large. So that’s the next area I’m different than President Bush.

And then let’s take the last one, championing small business. Our party has been focused too long. I came through small business. I understand how hard it is to start a small business. That’s why everything I’ll do is designed to help small businesses grow and add jobs. I want to keep their taxes down on small business. I want regulators to see their job as encouraging small enterprise, not crushing it.

Ask yourself: What in that speech would George W. Bush have disagreed with in 2000? He believed in "energy independence." He thought the Clinton administration hadn't done enough to goose domestic production. One of his favorite quips in 2000 was “My opponent says he is for natural gas – he just doesn’t like people to find it or move it.” You could insert that into any Romney speech today without missing a beat.

He also believed in cracking down on China, and being fiscally responsible (up to and including endorsing a balanced budget amendment to the Constitution), and keeping taxes low on small business. The problem is that presidents never start trade wars with China and Bush wanted tax cuts and defense spending and he knew spending cuts are unpopular (sound familiar?). As for keeping taxes low on small business, well, he did that. So Romney isn't promising anything Bush didn't promise. Nor is he criticizing what Bush actually did. All he's doing is repeating his plan. I would've thought he'd have a better answer than that.

- George W. Bush did support Medicare vouchers. President Obama, in an attempt to make Romney look more radical than Bush, said:

You know, there are some things where Governor Romney is different from George Bush. George Bush didn’t propose turning Medicare into a voucher.

That's not accurate. Bush did call for Medicare vouchers. It's on page 233 of his 2000 policy book:

The National Bipartisan Commission on the Future of Medicare was created as part of the 1997 Balanced Budget Act. The 17-member commission was led by Senator John Breaux, a Democrat, and Representative Bill Thomas, a Republican. The commission introduced a reform plan modeled after the Federal Employees Health Benefit Program, which provides benefits to approximately 9 million federal employees and their families and retirees. The plan called for a new solvency test based on the total cost of the program, guaranteed protections for low-income seniors, and a choice of government-approved and supported plans...As President, Governor Bush will seek to reform Medicare by building on these recent bipartisan efforts. 

That's written in an intentionally confusing way. But Bush is endorsing a premium support -- or voucher -- system for Medicare.

- The promises Obama kept. A young man asked Obama what he did to earn his vote in 2012. Obama responded with a stirring recitation of the many promises he kept:

Well, we’ve gone through a tough four years. There’s no doubt about it. But four years ago, I told the American people and I told you I would cut taxes for middle class families. And I did. I told you I’d cut taxes for small businesses, and I have.

I said that I’d end the war in Iraq, and I did. I said we’d refocus attention on those who actually attacked us on 9/11, and we have gone after Al Qaeda’s leadership like never before and Osama bin Laden is dead.

I said that we would put in place health care reform to make sure that insurance companies can’t jerk you around and if you don’t have health insurance, that you’d have a chance to get affordable insurance, and I have.

I committed that I would rein in the excesses of Wall Street, and we passed the toughest Wall Street reforms since the 1930s. We’ve created five million jobs, and gone from 800 jobs a month being lost, and we are making progress. We saved an auto industry that was on the brink of collapse.

Now, does that mean you’re not struggling? Absolutely not. A lot of us are. And that’s why the plan that I’ve put forward for manufacturing and education, and reducing our deficit in a sensible way, using the savings from ending wars, to rebuild America and putting people back to work. Making sure that we are controlling our own energy, but not only the energy of today, but also the energy of the future. All of those things will make a difference, so the point is the commitments I’ve made, I’ve kept.

Obama is right. He's kept more of his promises than most anyone thought he'd be able to.

- The promises Obama failed to keep. But this led to Romney's best moment of the night. Because even as Obama has kept many of his promises, hes whiffed on others, and the condition of the country is objectively pretty awful:

I can tell you that if you were to elect President Obama, you know what you’re going to get. You’re going to get a repeat of the last four years. We just can’t afford four more years like the last four years.

He said that by now we’d have unemployment at 5.4 percent. The difference between where it is and 5.4 percent is 9 million Americans without work.

I wasn’t the one that said 5.4 percent. This was the president’s plan. Didn’t get there.

He said he would have by now put forward a plan to reform Medicare and Social Security, because he pointed out they’re on the road to bankruptcy. He would reform them. He’d get that done. He hasn’t even made a proposal on either one.

He said in his first year he’d put out an immigration plan that would deal with our immigration challenges. Didn’t even file it.

This is a president who has not been able to do what he said he’d do. He said that he’d cut in half the deficit. He hasn’t done that either. In fact, he doubled it. He said that by now middle-income families would have a reduction in their health insurance premiums by $2,500 a year. It’s gone up by $2,500 a year. And if Obamacare is passed, or implemented -- it’s already been passed -- if it’s implemented fully, it’ll be another $2,500 on top.

The middle class is getting crushed under the policies of a president who has not understood what it takes to get the economy working again. He keeps saying, “Look, I’ve created 5 million jobs.” That’s after losing 5 million jobs. The entire record is such that the unemployment has not been reduced in this country. The unemployment, the number of people who are still looking for work, is still 23 million Americans.

There are more people in poverty, one out of six people in poverty.

How about food stamps? When he took office, 32 million people were on food stamps. Today, 47 million people are on food stamps. How about the growth of the economy? It’s growing more slowly this year than last year, and more slowly last year than the year before.

The president wants to do well. I understand. But the policies he’s put in place from Obamacare to Dodd-Frank to his tax policies to his regulatory policies, these policies combined have not let this economy take off and grow like it could have.

You might say, “Well, you got an example of one that worked better?” Yeah, in the Reagan recession where unemployment hit 10.8 percent, between that period -- the end of that recession and the equivalent of time to today, Ronald Reagan’s recovery created twice as many jobs as this president’s recovery. Five million jobs doesn’t even keep up with our population growth. And the only reason the unemployment rate seems a little lower today is because of all the people that have dropped out of the workforce.

This was, on first viewing, a devastating indictment of Obama. On rereading, it's still harsh and effective. But it's also telling. Most of what's in here either wasn't under Obama's control or flatly isn't true. Unemployment isn't 5.4 percent because the recession, which predated Obama's presidency, was vastly worse than anyone knew when that December 2008 estimate was made. That basically covers the food stamp and unemployment and median income charges, too. Obama could have done a bit better around the margins. But the bulk of the blame here goes to the recession -- and, for the record, our economic performance, given the kind of recession we had, is a lot better than most people realize.

Obama hasn't put forward a plan on Social Security, but between the Affordable Care Act and his 2013 budget, he's put forward a much more ambitious and detailed Medicare plan than Romney has. The promise to cut health insurance premiums by $2,500, while audacious and probably unlikely, is tied to the Affordable Care Act, which doesn't begin until 2014 -- so that's best understood as in progress. 

Finally, to compare the recession we just went through to the Reagan recession, which was deliberately induced by the Federal Reserve as a way to break inflation and solved when it lowered interest rates, is ridiculous. 

- Where's Obama's immigration bill? This is a good attack from Romney:

Now when the president ran for office, he said that he’d put in place, in his first year, a piece of legislation -- he’d file a bill in his first year that would reform our -- our immigration system, protect legal immigration, stop illegal immigration. He didn’t do it.

That's true. He didn't do it. Obama goes on to blame this on Republicans who didn't want to cooperate with him, which is a fair point. But he then blames their intransigence on Mitt Romney, who he says was the "standard-bearer" for the Republican Party in 2009 and opposed immigration reform. That's not such a fair point. Of course, Romney's attack here would make a bit more sense if he had proposed a reform of the nation's immigration laws. He is, in essence, attacking Obama for not doing something he opposes. 

- The China question. Romney says:

The place where we’ve seen manufacturing go has been China. China is now the largest manufacturer in the world. It used to be the United States of America. A lot of good people have lost jobs. A half a million manufacturing jobs have been lost in the last four years. That’s total over the last four years...China has been a currency manipulator for years and years and years. And the president has a regular opportunity to label them as a currency manipulator, but refuses to do so. On day one, I will label China a currency manipulator, which will allow me as president to be able to put in place, if necessary, tariffs where I believe that they are taking unfair advantage of our manufacturers.

Obama responds: 

as far as currency manipulation, the currency has actually gone up 11 percent since I’ve been president because we have pushed them hard. And we’ve put unprecedented trade pressure on China. That’s why exports have significantly increased under my presidency. That’s going to help to create jobs here.

So who's right? I called Joseph Gagnon, a senior fellow at the Peterson Institute for International Economics who has done a lot of work on currency manipulation and asked him.

"I think Romney is right that Bush and Obama haven't been tough enough on China," he said. "But every Republican I've talked to, and I've talked to three former assistant secretary or higher level members of the Bush administration, and all of them have said Romney will back down as fast as you can say 'flip-flop.' And I believe them. I think he'll name China a manipulator and then he'll do nothing. And he can get away with that, because they've improved the most of any of the currency manipulators. It would be very hard for us to threaten them now. Their current account peaked at 10.7 percent of GDP in 2007. This year, it looks like it'll only be 2 percent." 

If they've improved so much, I asked, doesn't that give credence to Obama's argument that he's forced them down? "Sure," said Gagnon. "But China was never more than a third of the problem. There are also countries like Singapore, Korea, Switzerland, Saudi Arabia. China was the leader, certainly, in 2007, at 30 or 40 percent of the problem. But that's changed now. "

Gagnon's broader view, he explained, is that there's a currency manipulation problem globally that we mistakenly think of as a China problem. You can read his full report on the subject here.

- We're not going to manufacture iPads here. We're just not. Candy Crowley asked:

CROWLEY: iPad, the Macs, the iPhones, they are all manufactured in China. One of the major reasons is labor is so much cheaper here. How do you convince a great American company to bring that manufacturing back here?

I don't know if this was a particularly good political moment for Obama. But I thought it was one of his best moments, simply because he gave an honest answer. The question was addressed to Romney, though, so let's begin with his reply:

The answer is very straightforward. We can compete with anyone in the world as long as the playing field is level. China’s been cheating over the years. One by holding down the value of their currency. Number two, by stealing our intellectual property; our designs, our patents, our technology. There’s even an Apple store in China that’s a counterfeit Apple store, selling counterfeit goods. They hack into our computers. We will have to have people play on a fair basis, that’s number one.

Again, that's word salad. Romney appears to be suggesting that Apple is choosing to manufacture its most cherished, important products in China because China steals our intellectual property. The reality, of course, is the reverse: Apple wouldn't go anywhere near China is it wasn't confident in the security of its intellectual property. Now, it's true that China does steal a lot of our intellectual property, but that's not why the iPad gets made there. 

Anyway, here's Obama:

Candy, there are some jobs that are not going to come back. Because they are low wage, low skill jobs. I want high wage, high skill jobs. That’s why we have to emphasize manufacturing. That’s why we have to invest in advanced manufacturing. That’s why we’ve got to make sure that we’ve got the best science and research in the world. And when we talk about deficits, if we’re adding to our deficit for tax cuts for folks who don’t need them, and we’re cutting investments in research and science that will create the next Apple, create the next new innovation that will sell products around the world, we will lose that race.

If we’re not training engineers to make sure that they are equipped here in this country. Then companies won’t come here. Those investments are what’s going to help to make sure that we continue to lead this world economy, not just next year, but 10 years from now, 50 years from now, 100 years from now.

"There are some jobs that are not going to come back." It's nice to hear that said simply and flatly in response to this question. The future of the American economy isn't putting iPods together. It's coming up with iPods, and designing the software, and improving the underlying technologies.

Bottom line of this debate: This is the part where I say who won or lost, I guess. And I think it's pretty clear: Obama won. He was about as good in the second debate as he was bad in the first debate. If he'd turned in this performance in their first confrontation, he'd probably have wrapped up the election.

But if Obama won the debate, he won because he was better at defending his record and shredding Romney's ideas. There wasn't much of an inspiring vision from the president -- or, for that matter, from the challenger. Obama's answers don't reveal a game-changing plan for the economy. Romney's answers don't even reveal a workable plan for the economy. 

There is, on Obama's side, an honesty to that, and maybe even a strategy. His administration knows they'll need to negotiate with Republicans for anything they might want to get done, so promising the country things Republicans won't pass is promising the country things Obama can't deliver. They also know that any bold ideas they run on will, in the heat of an election season, become anathema to the GOP -- which means the very act of making those promises makes them less likely to happen. If they're planning to make infrastructure part of the fiscal cliff deal, they're probably smart to leave it out of the campaign.

But the end result is that neither candidate is offering much of a vision for the economy. This was a good debate, but it's been a depressing campaign.