In a time of political and economic uncertainty, Americans are craving stability and solutions. They are certain the fiscal condition of the United States' government is abysmal, and corporations are sitting on trillions of dollars in cash owing to uncertainty about tax and regulatory policies. Americans are certain that if tax cuts are not extended at the end of this year, and budget sequestration takes effect at the beginning of next year, the economy will go over a fiscal cliff. They are certain the nation needs someone who will end the uncertainty and steer the country away from financial disaster.
This is the underlying reason why November’s presidential election is being called the most important of our lifetime. And the differences between the two candidates and their respective parties were on full display during the first full week after Mitt Romney became the presumptive Republican nominee.
President Obama’s campaign immediately played the class warfare, anti-capitalist card by attacking Mr. Romney’s work at Bain Capital. This tactic works only for those who fail to understand that Mr. Romney cut his teeth at Bain salvaging defunct businesses that were hemorrhaging cash, an experience that will likely prove invaluable when he grapples with the federal budget. Conversely, Mr. Obama’s resume is devoid of any private-sector experience, and the returns to date on his fiscal leadership show he has added $5 trillion to the national debt.
The president’s party’s leadership in the Senate has completely abdicated its most basic fiscal responsibility as the Budget Committee has now spent more than three years assiduously avoiding the consideration and passage of a budget resolution. On May 16, however, the Senate debated and defeated four Republican budget resolutions for fiscal year 2013.
Senators also considered the president’s fiscal year 2013 budget proposal, which would add $6.4 trillion to the national debt over the next 10 years and would never balance. It is so toxic and out of touch with reality that the Senate joined the House in a unanimous vote against the plan. Taxpayers can be certain that if Mr. Romney takes office in January, his first budget will be far different than the offensive offering from Mr. Obama.
On the day before the Senate took up the budget debate, Mr. Romney delivered a speech in Iowa on federal spending. He reiterated the need to make the government “simpler, smaller, smarter” in what is likely to become a common refrain through Nov. 6. He cited the Government Accountability Office’s 2011 report on federal overlap and duplication, providing as one example 94 programs in 11 agencies that “encourage ‘green’ building.” The savings from eliminating the waste identified in the 2011 GAO report and a similar 2012 report are estimated at $400 billion annually, just over 10 percent of annual federal expenditures.
The smear campaign launched by the president’s re-election team against Mr. Romney’s Bain Capital experience reveals more about the president than it does about the governor. The president thinks the federal government knows best and should intervene into the economy as much as possible to create jobs and redistribute wealth, and that the deficit can be reduced simply by “taxing the rich.” Mr. Romney thinks whoever can deliver the best results should run services and programs, be it state and local governments or the private sector.
Whether or not Bain Capital created 100,000 jobs or could not rescue some companies from bankruptcy, the firm achieved its objective of providing a solid return on the money that was provided voluntarily by individual investors. More importantly, the firm did not create the economic situation that has led to 12.5 million Americans being unemployed and only 63.6 percent of potential workers participating in the labor force, the lowest rate since 1981.
The result of the “investment” made by “Obama Capital,” which has used hundreds of billions of dollars of the taxpayers’ money to “create jobs,” has been a persistent 8 percent unemployment rate and annual trillion dollar-plus deficits. It is always easier to spend someone else’s money, especially when the personal consequences for failure are political (potential defeat at the ballot box), rather than financial.
As the debate unfolds leading up to Election Day, Americans will certainly be considering a choice between a candidate with no private-sector business experience and a track record of failing to rein in the size and scope of government, versus a skilled executive who will not be afraid to make the decisions necessary to stabilize the federal government’s finances. It is, in other words, a choice between continuing on the uncertain road to national bankruptcy and veering away onto a certain path to prosperity.
Thomas A. Schatz is president of the Council for Citizens Against Government Waste.