Photographer: Evan Sung

Real October Surprise Is Obama and Romney Agree

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Oct. 4 (Bloomberg) -- In heated elections like this one, there is a tendency in the U.S. to characterize the arguments between the two candidates as much more momentous -- world-historical, even -- than they actually are.

It’s exciting to be the party of free enterprise battling the forces of socialism. It’s flattering to think of yourself as a patriotic American running against a cosmopolitan internationalist. It’s useful to convince your donors that you believe in businessmen like them while your opponent believes only in government.

Conversely, it’s kind of boring to think of yourself as having a set of technocratic disagreements with the opposition. Yet, for the most part, that’s what this U.S. presidential election is about.

One of this year’s more amusing “Ideological Battle of the Century!” poses was recently adopted by Mitt Romney, the Republican nominee.

“There’s a tape that came out just a couple of days ago where the president said yes he believes in redistribution,” he said. “I don’t.”

Romney supports Medicare and Medicaid, as well as food stamps, Social Security and welfare. As governor of Massachusetts, he passed a health-care-reform law that subsidized insurance coverage for his state’s poor.

Romney, in other words, fully believes in redistribution. He just prefers a bit less of it than President Barack Obama. Saying otherwise might sound “severely conservative,” but it’s not actually true.

Percentage Points

A similar dynamic is evident on taxes. Obama’s budget proposes raising taxes to equal 19.8 percent of gross domestic product by 2022, a share of the economy that’s closer to tax policy under the last Republican administration than the last Democratic administration. Obama would keep most of the Bush tax cuts. Romney, by contrast, says he wants taxes at 18.75 percent of GDP by 2022. There is a genuine question about whether that’s achievable given the rate cuts Romney has proposed, but in theory, at least, the difference between the two candidates is about a percentage point of GDP annually.

Over time, that’s a difference of trillions of dollars. In terms of the kinds of support the government can provide to the elderly and the poor, and the kind of military we can afford, it matters. It doesn’t, however raise huge philosophical questions. And after negotiations with Congress and the inevitable reckoning between Romney’s plan and political and fiscal reality, the two plans would probably end up even closer.

This year’s campaign did present a few opportunities for ideological cleavage. Take health care. Although Obama’s plan is based on Romney’s reforms in Massachusetts, Republicans loathe it. Romney had an opening to endorse what many conservatives truly believe: It’s simply not the government’s role to help Americans gain access to health care. But Romney has never said anything of the kind. Instead, he has framed his opposition to Obama’s plan as a technocratic disagreement over whether you get better health outcomes through federal or state policies.

The government’s role in job creation offered a similar opportunity for a decisive philosophical break. Democrats and Republicans have long thought that the federal government can -- and during recessions should -- create jobs through direct spending and tax cuts. Since the 2008 financial crisis, however, Republicans have increasingly questioned the logic and legitimacy of such Keynesian stimulus. On the stump, Romney has echoed that view. “Government doesn’t create jobs,” he said. “It’s the private sector that creates jobs.”

Keynesian Response

But when asked if he would balance the budget in his first year as president, Romney gave an answer worthy of John Maynard Keynes himself.

“If you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5 percent,” he told Time magazine. “That is by definition throwing us into recession or depression. So I’m not going to do that.” Similarly, he criticized Obama’s defense cuts in an ad saying reduced Pentagon spending would “eliminate hundreds of thousands of jobs.”

Across the aisle, Obama continues to support additional stimulus, but his campaign has been emphasizing a package of tax increases and spending cuts to reduce deficits -- not stimulus plans. So the campaigns don’t disagree about whether government spending can create jobs or about whether we should be pivoting to deficit reduction.

On financial regulation, the Obama administration and the Romney campaign have both resisted calls for root-and-branch reforms such as breaking up large banks. Instead, Obama signed the ameliorant Dodd-Frank Act. Although Romney opposes Dodd-Frank, he has been vague about his objections to the law and emphatic in support of broadly similar regulations.

Even the single largest policy difference between the two candidates -- Romney’s proposed cuts to low-income programs like Medicaid -- is fundamentally a technocratic argument. Romney and his team contend that giving states control of Medicaid would produce huge savings and better care. The Obama administration (and most policy experts) is skeptical on both counts. Here again, the argument being made isn’t about whether we care for the poor, it’s about how we do it.

I don’t mean to play down the very real differences between the two campaigns. How much we spend, what we spend it on and who pays for it are all very consequential. But American politics operate atop a fairly firm and broad understanding about the proper scope of the state. Partisanship often obscures that fact, in part because the party out of power has reason to exaggerate disagreements with the governing party. Yet behind the boisterous partisan stage is a quieter arena where broad consensus reigns. Whether it’s a good consensus is, of course, another question.

(Ezra Klein is a Bloomberg View columnist. The opinions expressed are his own.)

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Today’s highlights: the editors on pastors who cross the political line; Susan Antilla on educating individual investors; Caroline Baum on Ben Bernanke’s forgetting Milton Friedman’s lessons; Jonathan Mahler on Washington’s annoying obsession with the Nationals; Cass R. Sunstein on why regulators are listening to you; Enrique Krauze on hopes for a miracle in Venezuela.

To contact the writer on this article: Ezra Klein in Washington at

To contact the editor responsible for this article: Francis Wilkinson at