Economy: Who the candidates really listen to
Wednesday March 5, 12:40 pm ET
By Jeanne Sahadi, CNNMoney.com senior writer
You might think that being part of a presidential candidate’s brain trust would mean high-level meetings in plush quarters with good food.
Not exactly. There are high-level meetings – but they’re more likely to be conducted by phone or on the fly between stump speeches.
As for the food, when asked what surprised him most about campaign life, John McCain adviser Douglas Holtz-Eakin said, “How much I like eating out of vending machines.”
But of course, with an economy to save and crowds to sway, who has time for dinner?
The economy is front and center in people’s minds, and the leading presidential candidates are relying on economic experts to help them win the pocketbook persuasion game.
Here’s a look at the top economic advisers to the leading candidates.
McCain campaign: Douglas Holtz-Eakin
Holtz-Eakin, chief economic adviser to Republican John McCain, is doing his best to upend the old saw that economics is the dismal science.
“The first thing the economics adviser brings to any campaign staff is a hip coolness and bling,” he wrote in the New York Times Freakonomics blog. “Economists want to be valued for their minds and respected for their command of policy proposals … but it just doesn’t work that way,” he wrote.
Nevertheless, Holtz-Eakin, a former director of the Congressional Budget Office and former chief economist on President Bush’s Council of Economic Advisers, is well-respected among deficit hawks for his positions on less-than-hip issues like entitlement reform, for which he’s advocated early and often.
In his view, the sooner the long-term shortfalls in Medicare and Social Security are addressed, the better for the economy. Shoring up both programs would involve tough choices when it comes to spending cuts, Holtz-Eakin has said, a route he believes would be more effective than tax increases. Both he and other economists estimate the economy is not likely to grow enough to offset the mandatory spending pressures that will build as Baby Boomers retire.
The country’s “current fiscal policy is unsustainable, as even draconian restraint in the annual spending on defense and nondefense programs are insufficient to guarantee that the current level of taxation will be sufficient to cover promises to seniors in retirement and health programs,” Holtz-Eakin wrote last spring in a public policy journal. “In short, U.S. fiscal policy requires fundamental shifts.”
Delaying reform, he went on to say, “will likely rely more heavily on tax increases to bring the budget into alignment because waiting permits spending to grow and tax increases are ‘quicker’ than benefit reductions.”
Obama campaign: Austan Goolsbee
Austan Goolsbee, a 38-year-old University of Chicago economics professor who advises Democratic frontrunner Barack Obama, is new to the presidential campaign scene. He is mostly an outside-the-Beltway guy, although he is a member of the panel of economists that advises the Congressional Budget Office.
Goolsbee said that one of the hardest parts of his job on the campaign trail was getting used to “having a BlackBerry buzzing on my hip 30 times an hour. It’s not the sort of thing you deal with as an economics professor.”
Neither is the current controversy over a conversation he had with a Canadian official about NAFTA.
But he is used to the politically fraught debate over how much to tax high-income Americans. In his estimate, the sky won’t fall if the top tax rate returns to 39.6% from the current 35%.
In one of his New York Times columns, Goolsbee points to data showing income for the top 1% of earners rose disproportionately relative to everyone else both when tax rates fell and when they rose.
“Seeing the same pattern … indicates that tax cuts weren’t responsible. It suggests that cuts for high-income taxpayers likely gave windfalls to those whose incomes were already rising sharply because of broader market forces,” he wrote.
Though he’s advising a Democrat, he’s managed to garner respect from some unlikely corners. “[Goolsbee] seems to be the sort of person – amiable, empirical and reasonable – you would want at the elbow of a Democratic president, if such there must be,” conservative columnist George Will wrote last October.
Clinton campaign: Gene Sperling
Far more seasoned on the political trail than Goolsbee or Holtz-Eakin is Gene Sperling, economic adviser to Democrat Hillary Clinton.
Sperling is a longtime member of the Clinton camp. He was national economic adviser to President Bill Clinton and currently is a senior fellow at the Center for American Progress, which is run by John Podesta, who served as President Clinton’s chief of staff.
What most surprised Sperling about campaign life this time around is how early candidates started talking about policy. In 1992, Bill Clinton’s campaign put out major proposals five months before Election Day. “This time, the policy announcements were starting a year before Iowa!”
While at the White House, Sperling played a central role in formulating economic policy, from coordinating the president’s Social Security and debt reduction efforts to helping expand the Earned Income Tax Credit for low-income workers.
Following his time at 1600 Pennsylvania Avenue, Sperling lent his talents to the Hollywood-version of the White House as a consultant and writer for “The West Wing.” That job, he said, did as much for his personal life as his time in the White House did for his professional one. At his first meeting with the show’s writers, he was seated next to a first-year writer who later became his wife.
In his book “The Pro-Growth Progressive: An Economic Strategy for Shared Prosperity,” Sperling calls for balancing the advantages of a global economy with the goals of protecting workers.
“With hundreds of millions of new middle-class consumers coming into the world economy, we should be confident that in the long run America will win more than it loses from an open global economy,” he writes. “What practical options do we have between simply assuming greater globalization will lift all boats, and resorting to self-defeating protectionism?”