A jobs plan that shrinks from some of the biggest issues.
The Wall Street Journal
Mitt Romney rolled out a major chunk of his economic agenda yesterday and well say this for it: His ideas are better than President Obamas. Yet the 160 pages and 59 proposals also strike us as surprisingly timid and tactical considering our economic predicament. Theyre a technocrats guide more than a reform manifesto.
The rollout is billed as Mr. Romneys plan for jobs and economic growth and it rightly points out that to create more jobs requires above all faster growth. This may seem like common sense but its a notable break from the Obama Administrations penchant for policies that target jobs rather than improving overall incentives for job creation.
So we have had policies for green jobs or construction jobs or teaching jobs or automobile jobs or temporary targeted tax cuts for jobseven as the economy struggles.
Mr. Romney seems to understand that the private economy will inevitably produce millions of new jobsin industries and companies we cant predictwhen it resumes growing at 3 or more. This is an important philosophical distinction that drives most of the Romney agenda.
So its good to see the former Massachusetts Governor endorse the House GOP effort to review and approve major new regulations that cost more than $100 million. Mr. Romney also joins the other GOP candidates in vowing to repeal ObamaCare and Dodd-Frank. Hed pull the Energy Department from the role as venture capitalist that it has pursued since the Bush Administration re-focusing it back on basic research rather than backing solar companies that go bankrupt.
His section on human capital is also laudable pointing out how little sense it makes to educate the worlds smartest young people in our universities only to send them home after they graduate. Hed offer more visas to keep more of them here. The former Bain Capital executive would also apply his management skills to revamping the vast federal job-training archipelago with its 47 programs. His proposal for personal reemployment accounts for laid-off workers isnt a new idea but it is worth trying.
Where the Governor is less persuasive is on the larger issues of taxes spending entitlements and trade. Here he ducks and covers more than he needs to.
On taxes Mr. Romney would immediately cut the top corporate income-tax rate to 25 from 35. His advisers say theres already a bipartisan consensus that the U.S. rate hurts American companies and theyre right. Even Mr. Obama agrees.
But on other taxes Mr. Romney shrinks from a fight. He says he favors tax reform with lower individual tax rates but only in the long run. His advisers say that means in the first two years of his Presidency but then why not sketch out more details?
The answer may lie in his proposal to eliminate the capital gains taxbut only for those who earn less than $200000 a year. This eviscerates most of the tax cuts economic impact and also suggests that hes afraid of Mr. Obamas class warfare rhetoric. He even picked Mr. Obamas trademark income threshold for the capital gains cut-off.
If Mr. Romney thinks this will let him dodge a class warfare debate hes fooling himself. Democrats will hit him anyway for opposing Mr. Obamas proposal to raise taxes on higher incomes dividends and capital gains in 2013. Perhaps Mr. Romney feels that his wealth and background make him especially vulnerable to the class charge but if he wont openly make the economic case for lower tax rates hell never get Congress to go along.
On spending Mr. Romney joins the GOPs cut cap and balance parade setting a cap on spending over time at 20 of GDP. What Mr. Romney doesnt do is provide even a general map for how to get there beyond cutting spending on nonsecurity domestic programs by 5 upon taking office.
He praises Paul Ryan for making important strides on Medicare but says his plan will differ without offering details. He also says there are a number of options to reform Social Security without endorsing any of them. We are told those specifics will come later. Its hardly unusual for candidates to avoid committing to difficult proposals but it wont help Mr. Romney contrast his leadership with Mr. Obamas.
By far the most troubling proposal is Mr. Romneys call for confronting China on trade. This is usually a Democratic theme but Mr. Romney does Mr. Obama one worse by pledging to have his Treasury brand China a currency manipulator if it doesnt move quickly to bring its currency to full value. Hed then hit Beijing with countervailing duties.
Starting a trade war is a rare policy mistake that Mr. Obama hasnt made but Mr. Romney claims it is a way to faster growth. His advisers say he doesnt favor a 25 tariff on Chinese goods as some in Congress do but once a President unleashes protectionist furies they are hard to contain.
His economic aides say this idea comes directly from Mr. Romney himself which is even less reassuring. It looks like a political maneuver to blunt the criticism hell receive because some of Bain Capitals companies sent jobs overseas or perhaps this is intended to win over working-class precincts in Pennsylvania and Ohio. But giving Americans the impression that a trade war will bring those jobs back to the U.S. is offering false hope. It also distracts from the other fiscal and regulatory reforms that are needed to attract capital and create jobs.
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The biggest rap on Mr. Romney as a potential President is that its hard to discern any core beliefs beyond faith in his own managerial expertise. For all of its good points yesterdays policy potpourri wont change that perception.
