Finally, the face-off voters have been waiting for. LET’S get ready to rumble!
With a little more than a month remaining until Election Day, TONIGHT, Barack Obama and Mitt Romney will meet for the 1st of 3 debates — one that promises to hold special interest for investors and workers.
3 of 6 – 15-minute segments will focus on the economy, giving each man plenty of time to seduce or spook markets with ideas about taxes, trade and entitlement policy. With Obama and Romney tied on the economy in a poll as recently as Monday, the two have extra incentive to sharpen their economic appeals.
Here are five things to watch TONIGHT beginning at 9 p.m. Eastern, when the two contenders go head to head at the University of Denver.
JOBS JOBS JOBS!
12 million jobs vs. 8% unemployment: It will be the first time that Obama personally gets the chance to take on Romney’s claim that his proposals will create 12 million jobs in his first term. More workers who buy more things would be a positive for U.S. companies, but the burden will be on Romney to explain a goal that some economists have dismissed as too rosy. The pressure is on Obama, meanwhile, to detail why joblessness is stuck above 8%. Expect Romney to cite that number repeatedly, especially since economists are expecting the unemployment rate to climb to 8.2% from 8.1% when the government reports payrolls data on Friday.
TAXES TAXES TAXES!
Tough talk on taxes: Few issues highlight the divide between Romney and Obama more than taxes, and Wednesday night may be the high point of their arguments on tax policy. Romney recently said Americans shouldn’t expect “a huge cut in taxes” because he also wants to lower exemptions and deductions. Obama’s natural question will be: which ones? Industries (for example, real estate) will want to pay close attention to his answers, as well as any new proposals from Obama. The president has called for reducing deductions for those making more than $250,000. If Romney can argue that that’s counterproductive to the economy, he gets a leg up.
Both also need to spend some time talking about investment taxes, says Jeff Sica, president of Sica Wealth Management. “Investors are most interested in hearing whether they’re going to see higher capital gains and dividend rates,” if the country goes over “fiscal cliff” and after the inauguration, he says.
SWING-STATE SHOUT OUTS!
In a race this close, vote-rich battleground states like Ohio, Florida and Virginia can make or break Obama or Romney. In those three, Obama is ahead right now, so look for both candidates to make appeals to voters in those states and others — even if they’re disguised. When Obama inevitably claims that Romney plans to end Medicare as it’s known, he’ll be talking primarily to Florida residents. And when Romney says he’ll crack down on China for manipulating its currency, he’ll be throwing red meat to workers in Ohio and other manufacturing states. Obama should do the same, suggests Tom Block, a public policy consultant and former head of government relations at J.P. Morgan Chase & Co. “If I was Obama I’d steal [Vice President Joe] Biden’s [Democratic convention] line: ‘Osama bin Laden is dead and General Motors is alive,’” says Block.
Dr. Obama and Mr. Romney: Health care is scheduled to take up one 15-minute segment of the debate, though the candidates could probably spend the entire hour and a half talking about it. Each candidate has sharp weapons to train on the other, so Wednesday could be a deal closer on the issue. To wit: 45% of respondents to the September Kaiser Health Tracking Poll said they had a favorable opinion of Obama’s signature health-care law, versus 40% unfavorable. That 40% figure gives Romney an opening, but he has to be careful. He needs to do a better job of explaining his Medicare program, as evidenced by the same poll. Obama has a 20-point lead with voters when it comes to doing a better job with the entitlement.
MR. NICE GUY!
Mr. Nice Guy: It may not immediately matter much to markets or investors who comes off as the more likable person on Wednesday night — but it’s going to matter in November. A Bloomberg News poll released last week showed voters had a higher opinion of the once-very-unpopular George W. Bush than they did of Romney, so the former Massachusetts governor has his work cut out for him. He’ll need to convince voters he’s better suited than Obama to be commander in chief — but must also motivate Republicans who are still lukewarm about his candidacy. Wednesday night is a golden opportunity for Romney to appear likeable, presidential and connect with voters — and for Obama to buttress the likability advantage he now enjoys.