it’s the economy, stupid

Russ Feingold and Ron Johnson faced off for a final debate Friday evening as WISN-TV’s Mike Gousha offered his own questions and those from citizen panels gathered around the state.

Gousha opened with a softball, “What is the greatest threat to our nation?”

“Out of control spending and debt, ” Johnson said quickly. “That is the issue across the state  – to create jobs and get the economy moving.”

Feingold agreed with Johnson that the economy – jobs, spending and debt – is the major issue for this election cycle.

But neither agreed on how to solve the problem.

Johnson used the debate to reiterate his message of cutting taxes, stopping the stimulus, and capping federal spending as the only solution to the economic malaise strangling the country. He repeated his new television spot that claims the federal debt was only $4 trillion when Feingold took office but now has ballooned to $14 trillion.

“It is a matter of governing philosophy,” Johnson said. “What kind of governing philosophy does he have? More spending and more taxes. My philosophy is less government, less taxes and less regulation. That is the correct philosophy.”

Feingold countered that he was in Washington and instrumental in helping President Bill Clinton realize a surplus. He also noted he has voted for tax cuts – the stimulus bill had withholding reductions for 95% of workers and the HIRE Act provides a payroll tax exemptions to employers who hire an unemployed or underemployed worker.

He also touted his Control Spending Now plan that includes 40 specific items to be cut from the budget to lower federal spending. Among those items – eliminating  a jet the Pentagon doesn’t want, requiring oil companies to pay for their drilling permits and stopping the free storage of cotton.

“(Johnson) wants to wipe that out and his statement about the stimulus not creating jobs or helping the economy is absolutely false. In fact, that bill prevented a depression and created or saved 1.4 million jobs,” Feingold said.

Johnson reminded voters that Feingold and the Obama administration had promised to create 3.5 million jobs with the stimulus and while it hasn’t delivered on those jobs it has delivered staggering debt. Instead, he wants to apply a businessman’s thinking to the problem, by lowering taxes and making the Bush tax cuts permanent.

“If we do that, the economy will grow because businesses will be able to grow, invest and hire, and consumers will want to purchase.”

It seemed both men want to claim tax cuts as their own idea, but just couldn’t agree on who should get them. Feingold argued for tax cuts to the middle  and working class; Johnson for the business and manufacturers who ultimately create jobs.

This sparring went on and on, sometimes refocused toward an audience question – who understands Main Street; did federal housing policy contribute to the collapse and how can it help in the recovery; will you privatize or make changes to Social Security; how does the Health Care Reform Act hurt or help the economy; which is better experience for a Senator – being a lawyer or a businessman.

Main Street

Johnson, the owner of a small manufacturing company, said he was more in touch with Main Street than Feingold, who has spent the last 18 years in the Senate meeting with small business owners, farmers and manufacturers.

Feingold stakes his claim to Main Street because has stood up to Wall Street, recently voting no to Senate bills that would have allowed banks and investment houses to continue to combine efforts and create their own regulations.

“The Wall Street Reform bill doesn’t adequately regulate large “too big to fail” banks, but hurts small banks,” he said. “I worked on a bill to help small banks, and businesses in Wisconsin like Harley-Davidson, Mercury Marine and ginseng farmers.”

Johnson said Feingold’s actions weren’t enough and the tax cuts contained in the stimulus bill didn’t work because they didn’t create certainty.

“All that we have is uncertainty on Main Street,” Johnson said. “We’re left with Cap and Trade, we’re left with Card Check. Business people see no hope that the economy is going to grow with these regulations.”

Health Care Reform

Johnson has repeatedly stated that the Health Care Reform Act was the impetus to his entering this race. He sees HCR as a tax increase, noting that 1,600 additional IRS agents will be hired to enforce it, and an attack on patients freedom to choose and cost-compare for services. He wants to repeal the act, but realizes that won’t be possible until the GOP takes over the White House. But he does want new legislation to include tort reform and cross-state portability of insurance coverage.

Feingold, while unhappy health care reform didn’t include the public option, would not repeal the bill.

“(Johnson) says he is for job creation and lowering spending. Why would we eliminate this and stir up a quagmire. My first priority is jobs and cutting spending.’

Johnson quickly retorted that HCR has or will add $675 billion in federal spending over the first 10 years of its existence, while Feingold argued that the Congressional Budget Office predicts $143 billion in savings in the first 10 years, with an additional $1.2 trillion of projected savings in the following decade.

Social Security

Johnson, like most Republicans, favors allowing younger workers to opt into some sort of privatized Social Security-like program. He acknowledges that current retirees and those approaching retirement should be exempted, but the idea of Social Security continuing in its present form is unrealistic. He warned voters that the fixes made in the 1980s to the Social Security fund to provide surpluses worked, but the surpluses were then taken from the fund and replaced with IOUs.

“Taxpayers were taxed once $2.2 trillion for Social Security and will be  taxed again to pay the bonds to cover that money which was spent on other things,” he said. “I will not agree to a payroll tax increase or will never force privatization on anybody.”

Feingold, like most Democratic candidates, promises to never privatize or offer the option on Social Security. Instead, Feingold wants to ensure the funds designated for Social Security are only used for those benefits, and he would like to increase the cut-off  amount for paying into Social Security. Currently, employees don’t have to contribute to the fund after they earn $106,800.  Feingold would raise that limit to at least $160,000 or eliminate it all together.

Of course, Johnson immediately labeled that as a tax on the wealthy.

Housing Policy

Johnson put much of the blame for the housing collapse and subsequent economic collapse on the federal government and its policies of forcing lenders to write loans to people who couldn’t afford loans.

“This was caused by Washington and the banks saw an opportunity,” Johnson said. “And after it happened, Congress reacted by creating a 2,300 page bill that didn’t address the problem.”

He added that the housing industry needs to be part of the recovery, but it won’t be until the administration removes the uncertainty from its policies and pulls back from increasing taxes in 2011.

Feingold said Johnson’s solution gives the big banks and Wall Street a pass on their role in the housing collapse, and he promised to hold them accountable. He also vowed to fight for the continuation of the mortgage interest deduction from income taxes as a way to encourage home ownership, something he has accused Johnson of considering to let lapse.

Johnson disputed he would cut that deduction but he has previously said that he would look “at horse trading with reductions of certain deductions.”

 

Businessman or Career Politician

Finally, a common theme in Johnson’s campaign has been his business experience versus Feingold’s law degree and 30 years as a politician. An Internet viewer asked the candidates if profiteers are good at running government.

Johnson immediately went to another oft-played commerical – him noting 57 senators are lawyers, while only one is an accountant and there are zero manufacturers.

“A businessman understands the discipline of having a surplus, a profit. I understand that too many career polticians just don’t understand that,” he said.

Feingold came back with a businessman of his own – Wisconsin’s senior senator, Herb Kohl.

“Kohl is a businessman and he looked at health care reform and said it was the right thing to do” Feingold said. “He looked at the recovery act and said it’s the right thing to do. What is wrong with his business judgement?

Johnson quickly answered “It failed,” adding that he would be the only manufacturer in the Senate, which he thinks will help America start manufacturing again.

In closing, the two candidates reiterated what they said all night – “We will reduce spending and increase job creation” – but each bearing a different road map.

“Wisconsin voters have a clear choice. (Feingold) cast the deciding vote for health care reform and stimulus and he voted for the last three budgets that have caused this debt,” Johnson said. “I would like to use my lifetime experience to get the economy going again. This nation is exceptional and it needs to thrive and that’s why I am running.”

Feingold said he wants voters to make their choice on which candidate is more fiscally responsible.

“I helped  balance the budget under Clinton. (Johnson) refuses to gives specifics on cutting and will only guarantee tax cuts for the wealthy,” Feingold said. “The people of Wisconsin expect me to be fiscally responsible and that is what I have done and that is what I will do.

We’ll all find out whose arguement was more persausive come next week Tuesday.