ANALYSIS-Economic differences slim between Clinton, Obama
03 Mar 2008 12:21:58 GMT Source: Reuters
By Jeff Mason SAN ANTONIO, Texas, March 3 (Reuters) - Democratic U.S. presidential hopefuls Hillary Clinton and Barack Obama like to highlight differences in how they would handle economic issues in the White House but their policies are largely similar in substance and tone. Both Obama, a senator from Illinois, and Clinton, a senator from New York, advocate repealing tax cuts put in place by President George W. Bush. Both candidates project a somewhat protectionist note on trade, saying they would opt out of the North American Free Trade Agreement unless it can be renegotiated to strengthen environmental and labor standards. And both are pushing for investment in clean renewable energy and caps on factory emissions of greenhouse gases. "On paper, they're quite close," said Leo Hindery, the top economic adviser to former Democratic candidate John Edwards. "On trade and jobs and taxation, which is sort of how you match all of this stuff, the proof is, I think, in the consistency." Obama, whom Hindery described as closer to Edwards on economic issues, has been more consistent than Clinton in his stances on a range of those issues, he said. Obama has tried to exploit that perceived weakness, accusing the former first lady of flip-flopping on NAFTA -- a key issue of concern in Ohio, which holds its nominating contest on Tuesday to determine who will be the Democratic nominee in the November election. Consistent or not, Clinton does have a longer record and that difference is something -- for better or worse -- that Wall Street appreciates. "If Hillary has an advantage, she's sort of a 'devil they know' in the markets. Obama is less well known and therefore less predictable," said Greg Valliere, chief political strategist at the Stanford Financial Group. "I think there's a lot of anxiety toward both of them, especially as they pander toward this populist sentiment ahead of the Ohio primary." WHERE THEY DIVERGE The economic similarities are representative of a wider dilemma voters face in choosing between the two candidates: in policy terms, the two Democrats mostly mirror each other. But there are differences. Advisers highlighted middle-class tax relief, retirement programs, and proposals to address the subprime mortgage crisis as three areas in which the candidates' economic approaches diverge. Obama's plan for middle-class tax relief is more broad-based, his key economic adviser Austan Goolsbee said, while Clinton's is more targeted, such as offering tax credits to encourage savings. On the housing crisis, Clinton has called for a 90-day moratorium on foreclosures of subprime mortgages and a five-year freeze on rates for those loans. Obama has said such a freeze would drive up rates for people trying to get new mortgages to buy or refinance homes. Clinton is opposed to raising the cap on payroll contributions at $97,500, according to her policy adviser Neera Tanden, but is open to lifting it for income above $250,000. Obama favors raising it from the lower amount. Substance aside, there are also differences in style and experience. Goolsbee said Obama differs with his commitment to simple economic policy that some call "iPod government" after the popular portable music player. That difference was exemplified by Obama's plan for automatic retirement savings, he said. "It's easy to use, it's effective, it's simple, so you don't need to have a degree in electrical engineering to figure out how to do it." Clinton argues her experience makes her best equipped to steward an economy that is nearing recession, and Tanden said the senator's years in the White House as first lady made her especially sensitive to the power of words. "She knows that words can send a signal to the markets," Tanden said. "That is ingrained in her." (Additional reporting by Caren Bohan; Editing by Xavier Briand)
