Cain Vs. Obama: A Comparison of Economic Issues

If you think Herman Cain versus Barack Obama is not possible, think again.

Just as President Obama defied the odds when he scored a decisive 2008 election victory, so too is Cain so far defying the odds with his unlikely status as the Republican Presidential frontrunner.

A mid-October 2011 Rasmussen survey of likely U.S. voters even showed Cain garnering 43% support, while Obama earned 41%. So again, anything can happen.

Whether or not Cain can maintain his popularity and ultimately earn the Republican Presidential nomination in 2012 remains to be seen. Meantime, here’s a look at how Cain stacks up against Obama, based purely on economic issues.

Taxes

Cain: His tax and economic policy can be summed up as the “9-9-9 Plan.” Under this proposal, Cain would overhaul America’s current tax code with a 9% personal income tax, a 9% business transactions tax, and a 9% federal sales tax. Cain has touted his plan as one that “expands the base” of taxpayers, thereby allowing the “lowest possible” rate of taxes for everyone.

But others have challenged Cain’s figures and assumptions, arguing instead that the poor would bear a greater tax burden. Other critics have even ridiculed “9-9-9” as lacking in merit and substance. In response, Cain recently tweaked his plan to carve out exclusions for low-income Americans. Nevertheless, Cain is steadfastly defending his idea, which would ultimately involve abolishing the IRS as we know it, removing all payroll taxes, reducing capital gains taxes, and eliminating the death tax.

Obama: The President has consistently called for “comprehensive tax reform” via greater tax breaks for the poor and middle class and increased taxes on America’s wealthiest citizens — especially millionaires and billionaires. At a fundraiser in Dallas in October, the president told the crowd: “I’ll tell you what, if asking a billionaire to pay the same tax rate as a plumber or a teacher or a bus driver makes me a warrior for the middle class, I will wear that charge with honor.”

Highlights of other tax-related proposals by Obama include: allowing the 2001 and 2003 tax cuts for upper income earners to expire ($866 billion); limiting deductions and exclusions for those earning above $250,000 annually ($410 billion); and closing corporate loopholes and eliminating special interest tax breaks (roughly $300 billion).

Big Business and Wall Street

Cain: The 65-year-old businessman is perhaps best known as being a former CEO of Godfather’s Pizza. But that was just one of a string of high-profile jobs and ventures that have given Cain a lot of real world business experience. Yet, some say Cain is too cozy with Wall Street and Big Business and out of touch with average Americans.

For example, less than one month into the Occupy Wall Street movement, Cain drew a lot of ire when he stated, in a Wall Street Journal interview, “Don’t blame Wall Street. Don’t blame the big banks. If you don’t have a job and you’re not rich, blame yourself.”

Obama: The President has long had a tenuous relationship at best with Wall Street and Big Business, neither of whom embrace Obama in part because of regulations and reforms he has pushed through during his presidency. Also, Obama is being supportive of the Occupy Wall Street protestors, going so far as to say that he too is fighting for the “99 percent” of Americans that don’t represent the country’s economic elite.

That’s a risky strategy for the President, considering America’s economy remains in the doldrums on his watch. Indeed, the Obama Administration hasn’t yet been able to successfully curb major economic problems like rampant foreclosures and high unemployment — two issues that are repeatedly brought up by Occupy Wall Street protestors and others.

Job Creation

Cain: Can the former pizza magnate, who was known for slashing headcount, be a massive job creator? On the one hand, Cain says no — at least in theoretical terms. “First of all, government can’t create jobs,” Cain has said. “The business sector creates jobs when businesses grow, and 9-9-9 encourages and inspires businesses to grow.”

 

On the other hand Cain has also said his 9-9-9 plan would create the right environment for growth, allowing him to create 6 million jobs and cut America’s jobless rate in half.

Obama: In September 2011,

President Obama unveiled the American Jobs Act, a $447 billion plan that has already been rejected by the Senate. The centerpiece of this proposal involves more loans and access to capital for entrepreneurs, as well as greater tax cuts to small businesses to help them hire and grow.

The tax breaks would be accomplished in three ways: slashing the payroll tax in half for the first $5 million in wages paid; temporarily eliminating employer payroll taxes on wages for new employees or raises for existing workers; and allowing large and small businesses alike to claim 100% expensing in 2012 for the investments they make in new plants and equipment.

Other components of the American Jobs Act involve tax credits up to $9,600 for those who hire veterans; increased investments to the tune of $50 billion in roads, railroads and airports; and $25 billion to update more than 35,000 schools nationwide. All of these efforts and more, Obama says, will put 2 million people back to work and bring down the U.S. unemployment rate, which now tops 9%.

Government Spending

Cain: On his campaign website, Cain talks tough about reducing government spending. “Though it might not be politically popular to modernize and eliminate some of our entitlement programs, responsible leaders should be willing to do it all the same,” he says, adding: “Nothing should be off the table. Every federal agency, every government program and expenditure must be reviewed and revised with a keen eye and a red pen…to shrink budgets by target percentages.”

Three programs he would slash presumably include Social Security, Medicare and Medicaid. In his new book, This is Herman Cain! My Road to the White House, Cain writes that he would “take this entitlement society to an empowerment society” by making cuts. What size cuts is not yet known. But observers say a 20% reduction would be needed to meet Cain’s “9-9-9 plan.” Such drastic cuts far exceed what other Republicans have proposed, and would be politically risky for Cain too.

Obama: In light of the federal budget deficit, which has topped $1 trillion in each of the past three years, Obama has acknowledged the need to rein in spending. But it’s not exactly clear which programs he would support cutting back. The President is currently waiting on a “super-committee” to offer recommendations by Thanksgiving about what programs should be cut in a bid to slash the deficit by $1.2 trillion over 10 years.

In the meantime, the President continues to be criticized by Republicans and others who say Obama is too focused on government spending and taxing the rich. Obama has countered those critics by saying such spending on social programs is necessary to get the economy moving and to help cash-strapped Americans stay afloat.