NEW YORK (TheStreet) -- The race for the White House is likely to hinge on which candidate can best sell his plan to get Americans back to work the fastest. The reality, sadly, is that both are likely to fall short on their promises.
The race is shaping up to be a choice between Mitt Romney, the former Massachusetts governor and ex-businessman who spent years cutting workers for the greater corporate good, and incumbent Barack Obama, who eked out small improvement in the jobs market over the course of three painful years.
Romney has prioritized job creation in his plan "Day One, Job One." Obama says getting the economy to grow faster and creating more jobs is "the most urgent challenge that we face right now." Here are some highlights on why both men face an uphill battle.
As the incumbent, Obama seems to have a more detailed jobs plan than Romney does. Much of his philosophy is based on incentivizing employers and employees based on changes to the broader tax code.
In his American Jobs Act, Obama says that he will give tax cuts for small businesses that are hiring, including a payroll tax holiday for firms that add new workers or increase wages for their current employees. He also plans to give tax credits for employers that hire Americans who have been unemployed for a long period of time. Also, five million Americans looking for work would get their unemployment insurance extended.
Most recently, Obama hosted a forum on "insourcing American Jobs," where he presented a plan to get companies to hire at home instead of investing in talent abroad. This involves eliminating tax advantages for firms moving their jobs abroad, playing well to the populist audience. Ohio, Michigan and other industrial states in the Midwest region would especially benefit.
However, tackling the U.S. tax code as a means to fix jobs will be a huge challenge given the bipartisan state of the nation. Obama has long wanted to close tax loopholes to prevent multinational firms from deferring taxes on income earned abroad. Many in Congress, however, won't like Obama's piecemeal approach because they believe the nation's tax code needs one major overhaul.
Critics say that Obama has the wrong approach to jobs because businesses looking to increase output and profit in the long term won't hire for the sake of collecting a short term tax bonus. Also, extending unemployment benefits doesn't incentivize those without a job to get one.
It's pretty easy to dump a bucket of cold water on Obama's jobs track: The nation's unemployment rate has stuck above 8.5% for 34 consecutive months. There are close to 14 million Americans without a job. And, as Romney points out, another 8.4 million are "underemployed" because they work part time when preferring full-time work.
Despite this, there are signs of life. The unemployment rate fell in November and December. Consumer sentiment has been turning higher, an indication that Americans feel more optimism about their job prospects. And, the number of weekly unemployment claims has been more or less trending lower. The latest read for the first week of January still stung a bit though. The economy saw a surprise rebound in weekly claims
, which economists say might be due to post-holiday season layoffs.
Romney says he plans to submit a jobs package to Congress on his inauguration day. One of his proposals is to reverse regulations from the Obama era that he feels burden job creation. He also wants to declare China a currency manipulator so he can sanction the country for unfair trade practices -- the argument being that free trade restores economic growth, thereby creating jobs.
Romney says he wants to "attract the best and brightest from around the world" in order to strengthen the jobs market, branding it his "human capital policy." According to his Web site, "Romney will also work to establish a policy that staples a greencard to the diploma of every eligible student visa holder who graduates from an American university with an advanced degree in math, science, or engineering."
In other words, if you're young and smart, you might just have a good chance of scoring a job under Romney's watch. This strategy plays to all employers who complain that they want to hire but can't find the right talent. It keeps the jobs at home, although critics would point out that it also broadens the pool of people looking for a job and increases competition for U.S. citizens who may not be as skilled.
| Mitt Romney
Romney recently told Time that while working at Bain Capital, he and the firm created more than 100,000 jobs. Then, he told FOX news that two million jobs were lost under President Obama's watch.
Critics say that Romney isn't being honest with his numbers because he didn't mention the number of jobs he destroyed while at Bain. To the latter point, he only highlighted the net number of jobs lost during the Obama administration. Obama supporters can point out that the economy was already hemorrhaging jobs when the president took office and that payroll numbers started climbing a few months into his leadership.
Given Romney's business experience, you can bet he knows how to run an efficient corporation. Running a country, however, will be a different story. Corporate America went through a cycle of cutting unnecessary costs and waste during the last recession. It's in no rush to go on a reckless hiring spree. However, an efficient workforce doesn't bode well for the headline jobs number, scrutinized by economists and investors at the beginning of every month.
Already, Romney walks a fine line between using his past experience in the corporate world as a selling point for his candidacy and detaching himself from the business crowd. He's said before that job cuts are necessary, yet he's not championing the same philosophy for broader America. "Any time a job is lost it's a tragedy," he said in South Carolina last week.
For an overview of the job creation strategies of other GOP presidential hopefuls, click here
-- Written by Chao Deng in New York.
>To contact the writer of this article, click here: Chao Deng
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