Early Thoughts Debate 3

Here are some early thoughts on the debate last night. President Obama did not get the knockout he needed. Foreign Policy was his major advantage and he needed to regain the ground lost from debate one here. He tried, but Romney came to play it safe and appear presidential. He played defense and concentrated on reassuring woman he was safe and not a threat. Why women? They are the place he is still closing the gap and more women were watching then men. There was Monday night football and a game seven of the national league championship on at the same time.

So Obama does well. Romney does not make a mistake and appears like a man that can be president. They both win.

Only two things can change this tomorrow. One is the fact checking. Did someone make a big mistake? Who was right on the bankruptcy? That one they argued and said the other was wrong. The second thing is the media. What does the main stream media do today? They are biased and sometimes don’t even realize how much. They are scared Obama could lose. What do they do today? Pay close attention.

 

After Last Night

Last night was the best Presidential Debate I have ever witnessed and I have seen them all. The candidates stood their ground and went at it. The end result is this. If you are an Obama supporter you loved him and he raised your spirits from the first debate. If you are a Romney supporter you were happy with his performance and ability to lay the case out against him. So both sides were reinforced.

Where this leaves us is here. The polls will stabilize. The Romney gains will cease, and Obama may edge back but only slightly. What that means is this election is dead even and whoever wins will get only 50 to 52% (at the highest) of the vote.

Romney’s advantage is a more motivated voter who is committed to voting. Obama’s edge is in his dollars and get out the vote effort. There will be a massive drive to assure people vote. So post debate we are close to a 48-48 polling result, with one big caveat. Obama has the electoral edge.

The big question is how this Libya issue plays out. Obama saying he declared it a terrorist act on day one may have won the night but might not win the war. The Republicans can play tapes of Obama at the U.N. fourteen days later saying the video led to the attack. They can play tapes of his saying similar things continuously and then ask the American people to decide. If he declared and knew it was terrorism on day one why did he blame the video? Why did Secretary Rice go on the four Sunday shows and blame the video?

Now the last thing that change it all. The old October surprise. The Obama administration tries to change the conversation. Today they announce they have identified who was behind the terrorist strike. That adds a new dimension to the conversation today and moves the focus off the last night a little. Then watch for a strike against the perpetrators before the election. It will be a move to show toughness and action. It could change everything.

A Tax Table To Help

Here’s a easy to see and view tax table that illustrates the 2012 tax rate, what 2013 will be and what Obama and Romney are referring tonight in the debate. It includes three areas:

Income tax rates

Capital Gains (The reason Romney paid 14% see earlier post)

Estate Taxes

It does not include the two medicare taxes that go into effect January 1, 2013.

 

Things To Listen For Tonight

Here are a few things to listen for in the debate tonight.

Trickle down.

Obama will refer more than once to Romney’s trickle down tax cuts. What that means is Romney wants to cut taxes on all and believes the ensuing consumer spending will drive the economy.

Romney will refer to Trickle Down Government, meaning Obama wants to raise taxes so the government can spend the money.

The question is do you believe people should spend their own money, or should the government do it for you? Whoever presents their position better goes a long way to winning the debate.

Taxes.

Obama will refer to tax cuts for the rich, “who don’t need it”. He is referring to Romney’s plan for cuts across the board. He will say he is for the middle class.

Romney will counter that yes he wants to lower rates but he is going to take away deductions from the higher income to assure their share of taxes remains constant. He will say he wants to help the middle class because they need it the most.

So why would Romney want to lower rates but lower deductions too? The answer is when you lower rates you put money in people’s hands that they spend. The deductions cuts only show up at tax time.

The question for you is do you want to raise taxes on the “rich” (family income over $250,000) or have them remain constant? If Obama can paint Romney for the rich he wins. If Romney can convince people he is for the middle class and the weathly won’t profit he wins.

Are we on our way to recovery or not ….

Obama will say over and over we are on the right path. Jobs are coming back, housing is recovering, he saved the auto industry and that he inherited a mess so bad it took this long to get us here.

Romney will say this is not what a recovery looks like when you come out of a down period. He will ask the question wasn’t it the President who said if we elect him unemployment will never reach 8%, that it would under 6% today and that he would cut the deficit in half?

The question to answer: Is this recovery and do you want to stay on the same track or do we need a new approach? If Obama paints the picture that the economy is back he wins. If Romney illustrates that Obama has failed and has no plan for the future he wins.

Back to the future

Obama will claim that Romney’s policies are back to Bush’s and how we got into the mess.

Romney has to explain why his approach is different and call Obama out on it.

This will go a long way to deciding who shines tonight. Can Obama corner Romney as old school? Can Romney paint Obama as out of ideas?

Libya

Obama will highlight that Hillary took the blame today. He didn’t know they asked for more support. He will try and cut Romney’s attack off by saying the buck stops with him. He will I predict take responsibility. He will then act tough and mention Bin Laden is dead and that he will hunt down those responsible. (BTW, this may well be an October surpise as the U.S. strikes back).

Romney will challenge him here. It’s your administration and why did you walk around for weeks blaming a video when this was clearly a terrorist attack on 9/11.

Obama will try and emphasis all he has done “got Bid Laden, ended two wars” to show toughness and leadership. Romney will try and show his vulnerability.  Your approach has not worked, you tried to sell the attack as a video reaction, the Arab spring is really an Arab Winter.

This will be a key segment as Obama’s strength at the outset of the campaign was foreign policy. Romney must dent him here.

What would Romney do different with Foreign Policy?

Ryan had trouble answering this and it’s a tough question. Obama might challenge Romney on it. What would you have done different in Iraq or Afghanistan? What would you do different in Iran, go to war? Romney needs a response.

Keep your eyes and ears open. The stakes are so high. Romney needs a strong performance to continue moving forward. He cannot stall now because as we pointed yesterday he may lead in the polls but he trails in electoral count. Obama needs to at least break even. If he loses here he may for the first time truly be in trouble.

The Election The Day Before Debate Two

With debate number two scheduled for tomorrow between Obama and Romney where does this election stand? Here’s a quick look and what’s at stake:

Since Presidential debate one the momentum has been all Romney. He closed the gap and nationally he has this race dead even.

Dead even is not good for incumbents. The undecided vote breaks for the challenger. So an incumbent  below 50% going into election day has real concerns.

Romney’s edge is he has momentum and the national race is even. He needs to maintain that surge.

Now here is where Obama has an edge. Though the national polls are even, it is the electoral college where the election is decided. Obama leads there:

He has these nine states with 142 electoral votes locked. (270 needed to win)

California (55), Delaware (3), Dist. of Columbia (3), Hawaii (4), Illinois (20), Maryland (10), Massachusetts (11), New York (29), Rhode Island (4), and Vermont (3)

Romney has these 13 states locked but only 76 votes.

Alabama (9), Alaska (3), Arkansas (6), Idaho (4), Kansas (6), Kentucky (8), Louisiana (8), Mississippi (6), Nebraska (5), Oklahoma (7), Utah (6), West Virginia (5), Wyoming (3)

  Add the following seven states leaning Obama that total 59 additional electoral votes and he has 201.

Connecticut, Maine, Minnesota, New Jersey, New Mexico, Oregon, and Washington

Romney can add ten more states with a total of 115 electoral votes giving him 191. The ten are:

Arizona, Georgia, Indiana, Missouri, Montana, North Dakota, South Carolina, South Dakota, Tennessee, and Texas.

So that means 11 states will decide the election no matter the national poll numbers. You keep hearing Ohio and how Romney can’t get there without it. Well it’s Florida that he has to win with it’s 29 electoral votes or he has no chance. He has taken the lead there but it is very close. Here are the eleven and where they stand today:

Colorado (9) – Romney leads by one point

Florida (29) –  Romney leads by 2-3 points

Iowa (6) –        Dead even

Michigan (16) – Obama leads by 5

Nevada (6) –     Obama leads by 2

New Hampshire (4) – Dead even

North Carolina (15)- Romney edging ahead by 2-3

Ohio (18) —      Obama leads by 3-4

Pennsylvania (20) —  Obama leads by 5

Virginia (13) — Romney leads by 1-2

Wisconsin (10) Obama leads by 5

If you add the states where they have slight edges to their totals then Romney adds to 257 and Obama would have 271, one more than needed with New Hampshire and Iowa not counted.

So there you have the stakes tomorrow night. Romney needs a strong performance to maintain his gains and add to them. He has closed the gap and can see a path, but he needs a dominant performance. President Obama needs to hold his own and stabilize the ship. If he can do that he has electoral college edge even if the national polls show a Romney edge. Romney if can flip Ohio can win. Without it he needs to add the states he is leading now (Florida, Colorado, North Carolina and Virginia) and add the two dead even states New Hampshire and Iowa while flipping Nevada. If not that he needs to flip a big one like Michigan or Pennsylvania, which is not likely.

The stakes are high for both men tomorrow night,

THE STAKES RISE ….

With last night’s VP debate behind us both sides emerge in tact and it’s on to a big one next Tuesday as Obama and Romney square off again. VP Biden played to his base and they loved his performance. Congressman Ryan did enough to satisfy his base. The spin today will be interesting. The Democrats will be delighted someone fought back and say Biden dominated. The Republicans will blast Biden for interruptions and bad behavior and say Ryan brought substance. Often in these debates the day after makes the difference. The fact checkers will play a big part. I have a feeling the biggest one will be about Libya. Who had the facts right?  Here are a few questions I would spin today:

If that is the real Joe Biden as his people are claiming do you want him representing our country with foreign leaders? Does that style work?

In two debates what is one new idea that this administration has for a second term? I haven’t heard it.

Since the presidential debate I have seen more commercials calling Romney a liar than anything. Are the Democrats going to continue wasting their money on that? Romney and Ryan have stood toe to toe, cut the liar commercials.

Big Bird didn’t come up. Paul Ryan should have brought it up. He should have asked Biden why all the commercials knocking the PBS comment. Mr Biden don’t you think Sesame Street would have its own channel and make all kind of money? Don’t you think they would survive very well without our taxpayer $300,000 million dollars? Do you really think they can’t survive without the government? Do you really not believe in free enterprise? Do you think with the trillion dollar debt that saving $300 million here and there doesn’t matter?

Ryan’s other miss was on the budget. We have not had a budget in this country for three years. Why? The Presidents budget was voted down 98-0 when submitted. You can’t produce a budget that one Democrat would vote for and you are going to solve the debt problem? Really?

Onto to Tuesday and the stakes are high for President Obama. He needs a win. A draw doesn’t help. He has spent millions painting Romney as everything bad. He got beat the first time. If he doesn’t win here this race tightens even more and credibility begins to come into question. It may actually do so before on the Libya issue.

The Morning After

Romney took it to the President last night and now comes the morning after, so what happens? The Democrats were devastated after the debate. They really didn’t know what to do. They were late to the spin room, shell shocked and seeking a message. The debate was that overwhelming. This AM they need to regroup. They will have their talking points and it will be like this. Romney misspoke. He didn’t give details. He was too general. They will try and corner Romney on lack of specifics. They are in damage control and the best way to do it is try and turn this back to focus on “Romney’s faults”.

The Republicans will be upbeat. Romney fund raising will have a record day. He lifted the spirit and they believe again. There will polls that report who won. As each comes out the numbers saying Romney won will grow as people become confident enough to say it. The general polls will show over the weekend a tightening and that this is a race again.

The keys to watch are Florida, Virginia, Ohio and Colorado. Florida was showing a slight Obama lead. I suspect the way Romney clearly articulated medicare and Obama’s failure to answer the charge he proposed cuts in it will be big. I would not surprised to see Romney take a slight edge in Florida. In Virginia and Colorado the race was almost dead even. I suspect here that Romney presenting himself so presidential will ease the way for undecided voters to move slightly. Look for Romney here to gain some. Ohio is a different animal. I don’t think this debate moves much there as Romney needs to address the auto industry bailout better.

Bottom line I see a tightening slightly but still an electoral college edge for Obama. However, Romney regained his footing and is moving again. Messaging now and the two additional debates make it possible for him. Next up, Biden versus Ryan. That should be a real slugfest as Biden knows he needs to attack and Ryan is tough and unafraid. Buckle up next Thursday night.

While on the subject of taxes…….

While we have been discussing taxes (Fair Share and Interest Income) the past few days let’s do one more thing prior to the debate. Let’s take a look at the taxes now set to go into effect for 2013 and see if the candidates are asked to address this. We won’t touch healthcare taxes here, only payroll.

First off believe it or not the government reduced the social security tax taken from your paycheck the past two years to 4.2% from 6.2%. It was done to try and get money into people’s hands to spend in the marketplace. Think about the fact that the government decided to cut social security revenue into the system at a time the program is going bankrupt. That is another issue. For now understand that on Jan 1, the rate reverts to 6.2%. What does that mean in real dollars for you

– If you earn $35,000 your tax bill is going up by $700.00

– If you earn $110,000 it is going up by $2,202.00

This is a given so get ready.

Part two is the Bush Tax cuts. Let’s put this in perspective. In 2001 President Bush wanted to spur the economy so they reduced rates. The Democrats fought back and didn’t want the reduction. So the sides agreed on a ten year period for the rates. When the period was up they bickered but President Obama decided to extend it until Jan 1, 2013. Why? Well it was hard to think about raising rates in the economic conditions we were in and Jan 1, 2013 is two months after the election. Pretty simple. Here are the rates scheduled to expired and what you are scheduled to pay.

Tax Brackets (2012 Dollar Amounts) Marginal Rate
Unmarried Filers Married Joint Filers
Over But Not Over Over But Not Over 2012 2013
$0 $8,700 $0 $17,400 10% 15%
8,700 35,350 17,400 70,700* 15% 15%
35,350 85,650 70,700* 142,700 25% 28%
85,650 178,650 142,700 217,450 28% 31%
178,650 388,350 217,450 388,350 33% 36%
388,350 388,350 35% 39.6%

The average increase is 3% for most filers with the highest income bracket going up 4.6%.

Yes this is scheduled in addition to the 2% increase on social security. So the average person faces a 5% increase.

Now follow this argument for a second.

The Democrats say this is fair share and not an increase. That the rates were a 10 year cut only and time is up.

The Republicans say it should have been permanent and that for 12 years people have paid these rates and this is an increase.

That’s not sll. On Januaary 1 the Capital Gains (Bank and Stock interest/dividends) we discussed on Friday is also going up. Here is that table:

Maximum Rates 2012 2013  
Long-Term Capital Gain 15% 20%  

So we face a 5% Long Term (held one year or longer account or stock) increase.

Since all of the above is in place and set to take effect on Jan. 1, listen to the debate see if this is addressed and how each side will handle. Then decide. Fair share or too much? Good for the economy or bad? A job creator or job elminator?

YOUE CHOICE, OUR FUTURE