Romney's Fiscal Plan Still Lacks Detail

NEW YORK ( TheStreet) -- Mitt Romney said Sunday that a change in fiscal policy, not monetary policy, would make a significant difference in the job market, but the Republican nominee's view of that change may not offer the most efficient plan.

While President Obama mostly has respected the separation of powers between the Federal Reserve and the Executive Branch, Mitt Romney has repeatedly questioned central bank action.

"I don't think that easing monetary policy is going to make a significant difference in the job market right now," Romney said in an interview on NBC's "Meet the Press." "I think what the nation needs is a change in fiscal policy. A different structure to our economic positions."

Romney has consistently pitched that fiscal policy, instead of monetary easing, would be a surefire way to reinvigorate the jobs. He suggests ideas like capping spending at 20% of GDP, taking steps toward a smaller government and reducing the overall federal workforce by 10%.

"The fiscal stimulus has not been particularly good at providing jobs, so future administrations will have to ensure that stimulus is much more labor intensive than it has been," said Tanweer Akram, a senior economist at ING Investment Management. "There has to be public works programs and large-scale employment programs, and incentive for the private sector to hire people."

Akram believes the next administration will have to provide tax incentives and greater certainty about regulation from Congress in order to promote private sector growth.

Romney has outlined some of these ideas on his Web site, but has left voters with an ambiguous blue print.

For example, on regulatory burdens, Romney has said he would repeal Dodd-Frank and replace it with "streamlined, modern regulatory framework," without reference to what constitutes a modern regulatory framework. He has also stated that a Republican administration would review and eliminate all Obama-era regulations that burden the economy -- again, there is not a mention of which regulations he may scale back.

On taxes, the GOP nominee is more specific as he has said he would cut the corporate tax rate to 25% and repeal the corporate Alternative Minimum Tax, or AMT.

Even these ideas, though, have been bogged down in a deadlocked Congress that has refused to reach an agreement on how to avoid the so-called fiscal cliff.

In May, Bank of America Merrill Lynch ( BAC) expressed little confidence in Congress as it questioned the legislative body's ability to make decisions on the expiring Bush tax cuts, payroll tax, the AMT and critical spending cuts.

Romney's comments resonate with many American voters who would be opposed to a third round of monetary stimulus, but they ignore the fact that fiscal policy has been hung up by a deeply divisive Congress with the House of Representatives (Republican controlled) and Senate (Democratic controlled).

So while many may cheer Romney's criticism of more Fed easing, voters would be wise to consider that intentional inaction by Congress has seemingly forced the central bank's hand.

-- Written by Joe Deaux in New York.

>Contact by Email.

More from Politics

China Empire Strikes Back at U.S. LNG

China Empire Strikes Back at U.S. LNG

Striking Options: Tariffs, Equities, Rates

Striking Options: Tariffs, Equities, Rates

Bears Are Giving Up on the 'Trade War Will Kill the Market' Theme

Bears Are Giving Up on the 'Trade War Will Kill the Market' Theme

How to Play Ailing Micron Technology on This Drop: Market Recon

How to Play Ailing Micron Technology on This Drop: Market Recon

Shanghai Composite Index's Technical Patterns Aren't Uplifting

Shanghai Composite Index's Technical Patterns Aren't Uplifting