What Jim Lehrer Should Ask In Tonight's Debate

Tonight's debate between Mitt Romney and President Barack Obama will be about domestic policy, and if the last few months of this campaign are any guide, that means the candidates will mostly be discussing long-range topics: how Medicare and Medicaid should be reformed; who should pay higher taxes and on what; whether Obamacare was a good idea or not.

This is unfortunate. Long-range fiscal issues and the welfare state are important, but they won't be Job One in 2013. The most important and under-discussed policies are the federal government's fiscal, monetary and housing reactions (or lack thereof) to the ongoing state of high unemployment and slow economic growth. At the risk of being mocked by my colleague Zara Kessler, here are some questions the candidates should face:

-- Democrats and Republicans reached bipartisan agreement on a payroll tax holiday for 2011 and 2012 in response to the weak economy. Economic performance remains sluggish. Why shouldn't the holiday be extended for another year? Will a 2 percent rise in payroll tax rates for 2013 harm the economy?

-- What should be done about the "fiscal cliff" set for the end of the year? Each of you has identified tax increases and spending cuts in the cliff that you would like to reverse. Should those reversals be done without offsets, so that the budget deficit grows? If you would offset them, what taxes would you raise and/or what  spending would you cut to do so?

--Has the Federal Reserve been too aggressive, not aggressive enough or about right in response to the economic conditions?

--Federal Reserve Bank of Chicago President Charles Evans has called for the Federal Reserve to commit to keep interest rates near zero until unemployment is below 7 percent or inflation is above 3 percent. Is this a good idea? If not, what problems do you think it would create?

--Governor Romney, you have said you would fire Ben Bernanke. Why do you think he should be fired, and what would you want a new Fed chief to do differently?

--What, if anything, should the federal government be doing to assist underwater homeowners that it isn't doing now? Should the federal government be doing more to lower interest rates for underwater homeowners? What about principal balances?

I think we will see a little bit of this, particularly on the fiscal cliff. I doubt we will see much monetary policy discussion, which is a shame. People often act like monetary policy is over everybody's head, but it was central to election campaigns in 1976 and 1980. Even in the 1990s, Bill Clinton made low interest rates a major selling point for his policies.

I don't expect a discussion of nominal gross domestic product targeting, but I think the Evans Rule is simple and important enough to discuss in a presidential debate. Jim Lehrer would do well to bring it up.

(Josh Barro is lead writer for the Ticker. E-mail him and follow him on Twitter.)


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