Expect a lot of economic red meat and Obama-bashing from Republican candidates when they step onto the debate stage for the first time Thursday evening.
With 10 candidates in the main event and a half-dozen in an earlier panel, the candidates will be under pressure to distinguish themselves from the pack. All the Republicans will tout low taxes and spending while blaming President Obama for slow growth, but they’ll have to find ways to create a unique appeal to conservative primary voters.
Here’s what to watch for:
Dealing with Trump’s success
One major wild card in the debate will be the presence of billionaire Donald Trump, who deviates from Republican economic orthodoxy on a number of points, but will be able to boast about his personal success as evidence that he can improve the economy.
Other candidates who are not rich, such as Wisconsin Gov. Scott Walker or Florida Sen. Marco Rubio, will have to strategize about how best to address Trump’s wealth.
“I think they ought to emulate Donald Trump in their audacity, not in specific quotes,” said Arthur Laffer, a former Reagan administration economist widely regarded as the father of supply-side economics.
“These guys should come out and say: ‘There’s nothing wrong with being rich. I want everyone to be rich,'” said Laffer, who has offered advice to a range of Republicans.
Wall Street
With the economy still suffering from the effects of the financial crisis, the public — including Republican voters — is wary of Wall Street. Although Republicans are more skeptical of government regulation than Democrats, some candidates may try to find a way to criticize big banks and capture populist anger at the financial industry.
“I doubt you’re going to hear a ton of praise for Wall Street. It’s just easy to beat up on the banks,” said Douglas Holtz-Eakin, the president of the American Action Forum who was a campaign economic adviser to Sen. John McCain in his 2008 presidential run.
A few of the candidates, such as Sens. Ted Cruz of Texas and Rand Paul of Kentucky, have flirted with populist language relating to Wall Street.
Last week, former Texas Gov. Rick Perry proposed to eliminate bank bailouts with a plan that includes a restoration of the Depression-Era Glass-Steagall separation of commercial and investment banks. That plan is also championed by Sen. Elizabeth Warren of Massachusetts, famous for bashing Wall Street.
Perry will appear on the undercard at Thursday’s debate, but other candidates may follow his lead or else try to argue, as Mitt Romney did in 2012, that the reforms signed into law by Obama have aided big banks at the expense of small banks.
In criticizing the Dodd-Frank financial reform law for hurting only small banks, Holtz-Eakin said, “by your silence, you indict the larger financial institutions.”
Borders
Immigration and, to a lesser extent, trade are still issues that divide Republicans between a business establishment and a conservative base.
Trump has placed himself squarely in the populist conservative camp in recent months, with tough language on illegal immigration and Obama’s push for a Pacific-nation trade deal.
Other candidates have staked out similar positions, with less rhetoric. For instance, former Arkansas Gov. Mike Huckabee and former Hewlett-Packard CEO Carly Fiorina came out against giving Obama special authority to negotiate free-trade agreements, while Cruz has pushed hard against illegal immigration. They might be talked into competing with Trump to appeal to disgruntled voters on those issues.
That would cut against supply-side theory. “It’s called a win-win, it means free trade, comparative advantage — David Ricardo, for God’s sakes,” Laffer said of trade. “It ain’t rocket surgery. And to bash China, and to go zonkers on illegal aliens is in my mind an economic mistake.”
Corporate welfare
GOP candidates also will be forced to choose between business and conservative ideology on a few key issues, such as reauthorization of the Export-Import Bank.
Phasing out Ex-Im, which facilitates credit for buyers of U.S. exports, is a top goal of GOP megadonors Charles and David Koch.
Former Pennsylvania Sen. Rick Santorum and South Carolina Sen. Lindsey Graham support the bank, but most of the top candidates have said that Ex-Im should be phased out, on the grounds that it subsidizes big business such as Boeing.
The Kochs, however, would like them to go further.
In an interview published this week by the Washington Post, Charles Koch said that “the government is largely influenced by people who advocate corporate welfare and advocate these policies that create this two-tiered society. … I mean, I would get rid of all the corporate welfare.”
Look for hard-line conservatives such as Cruz to push for ending not just Ex-Im, but also federal preferences for ethanol and sugar production.
