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I'm Jim Lehrer the PBS -- hour and I welcome you to the first of the 2012.
Between president Barack Obama.
The democratic nominee.
And former Massachusetts governor Mitt Romney the Republican nominee.
This debate and the next three to presidential one vice presidential.
Are sponsored by the commission.
On presidential debates tonight's ninety minutes will be about.
Domestic issues and we'll follow a format designed by the commission.
There will be six roughly fifteen minute segments with two minute answers for the first question.
An open discussion for the remainder of each segment.
Thousands of people offered suggestions on segment subjects -- questions.
Via the Internet and other means.
But I made the final selections and for the record.
They were not submitted for approval to the commission or the candidates.
The -- -- I announced in advance will be three on the economy and one each on health care.
The role of government and governing.
With an emphasis through lap on differences.
Both candidates will also have two minute closing statements.
The audience -- in the -- has promised to remain silent.
No cheers applause and boos -- among other noisy distracting things so we may all concentrate.
On what the candidates have to say.
There -- the noise exception right now though as we welcome.
And governor rod.
Gentlemen welcome to you vote.
Let's start the economy.
And let's began -- jobs.
The major differences.
Between the two view.
About how you would go about creating new jobs.
You have two minutes each -- you have to minister to start a coin toss is determined mr.
president -- foreigners.
Well thank you very much Jim for the -- -- wanna thank.
Governor Romney in the University of Denver for your hospitality.
There -- a lot of points I -- make tonight about the most important one.
Twenty years ago -- became what -- man on earth because Michelle Obama agreed to marry me.
And so I just want to wish.
Sweetie you happy anniversary and let you know that a year from now we will not be celebrating it in front of forty million people.
-- four years ago we went through.
The worst financial crisis since the Great Depression.
Millions of jobs were lost -- auto industry was on the brink of collapse.
The financial system have frozen up.
And because of the resilience.
And determination the American people we've begun to fight our way back.
Over the last thirty months we've seen five million jobs in the private sector created the auto industry's come roaring back and housing.
Has begun to rise.
But we all know we've still got a lot of work to do and -- the question here tonight is not where we've been boat where we're going wrong.
Governor Romney has -- perspective that says if we cut taxes.
Skewed towards the wealthy and roll back regulations that.
Will be better off -- got a different view I think we've got invest in education and training.
I think it's important for us to develop new sources of energy -- in America.
That we change our tax code to make sure that we're -- and small businesses and companies that are investing here in the United States.
We take some of the money that we're saving as we wind down a two wars to rebuild America.
And that we reduce our deficit in a balanced way that allows us to make these critical investments.
Now it ultimately is going to be up to the voters to you which perhaps we should take.
Or get a double down on the top down the economic policies -- -- help to get us into this mess or do we embrace a new economic patriotism.
That says America does best when the middle class does best and I'm looking forward to having that right.
-- running two minutes.
Thank you Jim it's an honor to be here with you and I appreciate the chance to be with the president.
I'm pleased to be -- -- -- -- Denver appreciate their welcome and also the presidential commission on these debates.
Congratulations to you Mr.
President on your anniversary I'm sure this was the most most dramatic place you could imagine here here with me so I.
That is obviously a very tender topic.
I've education over the last couple of years of meeting people across the country I would send Dayton Ohio and a woman grabbed my arm -- -- I've been out of work since may.
Can you help me.
And yesterday it was a rally in Denver and a woman came up to her with a baby in her -- And -- and my husband -- -- for jobs in three years part time jobs he's lost his most recent job.
And -- not just lost her home can you help us in the answer is yes we can help.
But it's gonna take a different path.
Not the one we've been on.
Not the one the president describes as a top down.
Cut taxes for the rich that's not what I'm going to do.
My plan has five basic parts one get us energy independent North American energy independent that creates about four million jobs.
Number to open up more trade particularly in Latin America.
Crack down on China if and when they -- number three make sure people have the skills they need to succeed and the best schools in the world -- world far away from that now.
Number four get us to a balanced budget.
Number of five champions small business it's small business that creates the jobs in America.
And over the last four years small business people who decided that America may not be the place to open a new business.
Because new business startups are down to a thirty year low.
I know what it takes to get small business going again to hire people.
Now I'm concerned that the path that -- -- has just been unsuccessful.
The president has a view very similar to the -- he had.
When he -- for years ago that a bigger government spending more taxing more regulating more if you will trickle down government would work.
That's not the right answer for America are restored the vitality he -- America working again thank you.
Please respond directly to what the governor just said about trickle down.
His trickle down approach he's he's he's had years -- Well let me talk specifically about what I think we need to do.
First we've got to improve our education system.
And we've made enormous progress drawing on ideas.
Both from Democrats and Republicans.
That -- already starting to show gains in some of the toughest to deal with schools we've got a program called race -- -- top that.
Has prompted reforms in 46 states around the country raising standards improving how we train teachers and -- wanna hire another 100000.
New math and science teachers.
And create two million more slots in our Community Colleges so that people can get train for the jobs that are out there right now and I wanted to make sure that we keep.
Tuition -- for our young people.
When it comes through our tax code governor Romney and I both agree that our corporate tax rate is too high.
So I wanna lower particularly for manufacturing -- down to 25% but I also want to close.
Those loopholes that are giving incentives for companies that are shipping jobs overseas I want to provide tax breaks for companies that are investing here in the United States.
On and urging governor Romney and I we both agree that we've got to boost American energy production and oil and natural gas production there higher than they've been in in years.
But I also believe that we've got look at the energy source the future like wind and solar biofuels.
And make those investments so.
All of this is possible now in order for us do what we do have to close our deficit and -- -- things I'm sure will be discussing tonight is.
How do we deal with our tax -- And how we make sure that we are reducing spending and a responsible way but also how to we have enough revenue to make those investments and this is where there's a difference because governor Romney's.
Central economic plan calls for a five trillion dollar tax cut.
On top of the extension of the bush tax cuts that's another -- -- dollars and two trillion dollars in additional military spending that.
Military hasn't asked for that's a trillion dollars.
How we pay for that reduce the deficit and make -- investments that we need to make without.
Dumping those costs on the middle class Americans I think is 1 of the central questions this campaign.
Well the view of this.
Spoke spoken about a lot of different things we're gonna try to get through them.
In this specific away as we possibly -- but -- -- -- governor -- -- a question that you don't like to ask the president directly.
About something he just said.
-- -- -- that clear the record and go through piece by piece first of all I don't have a five trillion dollar tax cut I don't have a tax cut.
Upscale that you're talking about my view is that we ought to provide tax relief to people in the middle class but I'm not gonna reduce the share of taxes paid by high income people.
Higher income people are doing just fine in this economy they'll do fine with -- -- president Ryan the people who are having a hard time right now are middle income America.
-- under the president's policies middle income Americans have been very.
They're they're just being crushed middle income Americans have seen their income come down by 4300.
This is that this is attacks in and of itself -- the economy -- he's been crushing the same time gasoline prices have doubled under the president.
Electric rates -- up food prices are up.
Health care costs have gone up by 2500 dollars a family.
Middle income families are being crushed.
And so the question is how to get him going again I've described it its energy and trade the right kind of training programs balancing our budget.
And helping small business those those of the the cornerstones of my plan but the president mentioned a couple of other ideas -- note.
First education I agree education is key.
Particularly the future of our economy.
But our training programs right now we got 47 of them housed in the federal government.
Reporting to eight different agencies.
Overhead -- overwhelming we gotta get those dollars back to the states.
And go to the workers so they can create their own -- ways to get in the training they need for jobs so we're really help them.
The second area taxation we agree we -- to bring the tax rates down and I do both for corporations and for individuals.
But in order with the first not to lose revenue have the government run out of money.
-- also lower deductions and credits and exemptions so that we keep taking in the same money when you also account for growth the third area energy.
Energy is critical and the president pointed out correctly that production of oil and gas in the US is up.
But not due to his policies.
In spite of his policies Mr.
President all of the increase in natural gas and oil has happened on private land.
Not on government -- And government land your administration has cut the number of permits and licenses in half.
If I'm president I'll double them.
And also get that the oil from offshore in Alaska had to bring that pipeline in from Canada.
And by the way I like Cole.
I -- to make sure we can continue to burn clean coal people in the coal industry feel like it's getting crushed by your policies.
I want to get America and North America energy independent so we can create those jobs and finally with regards to that tax cut look.
I'm not looking to cut massive taxes and to reduce that the revenues going to the government.
Mike Mike number one principle is they'll be no tax cut that adds to the deficit.
When on the line that no tax cut that adds to the deficit but I do want to reduce the burden -- being paid by middle income Americans.
And I happened to do that that also means I cannot reduce the burden paid by high income Americans so any any that language the contrary is simply not accurate.
President -- -- let's.
Talk about taxes because I think it's instructor.
Four years ago when I stood on the stage I said that.
I would cut taxes for middle class families.
And that's exactly what I did we cut taxes for middle class families.
By about 3600 dollars and the reason is.
Because I believe that we do best when the middle class is doing well and by giving them those tax cuts -- -- money in the pocket.
And so -- by a new car.
There are certainly.
In a better position to weather the extraordinary recession we went through they -- -- a computer for their kid who's going off to college.
Which means they're spending more money businesses have more customers does make more profits and then hire more workers.
Now governor Romney's proposal.
That he's been promoting for eighteen months calls for.
-- five trillion dollar tax cut on top of two trillion dollars of additional spending for military.
And he is saying that he is going to pay for.
By closing loopholes and deductions the problem is bad.
He's been asked a -- Over a hundred times how you would close those deductions and loopholes.
And and he hasn't been able to identify -- but I'm an American important point here Jim.
When you add up all the loopholes.
And deductions that upper income individuals.
And are currently taking advantage if you take those all away.
You don't come close to paying for five trillion dollars in tax cuts in two trillion dollars in additional military spending.
And that's why independent studies looking at this said the only way to meet the governor Romney's pledge of not reducing the deficit.
Or -- or not.
Adding to the deficit.
Is by burdening middle class families the average middle class family would -- would pay.
About 2000 dollars more now that's not my analysis that's an analysis of economists who have looked at this and and that kind of top desk top down -- -- folks at the top are doing well also the average person making three million bucks.
Is getting the 250000 dollar tax break.
-- middle class families.
-- -- further that's not what I believe is a recipe for economic growth.
What is the difference -- that just.
Contact us but I get up right -- -- just didn't just contacted for comment public but what is -- -- purchase virtually of the need to set about my tax plan is inaccurate all right so so if if the tax plan he described.
We're -- tax plan I was asked to support I'd say apps and -- And looking for five trillion dollar tax cut what I've said is I won't put in place a tax cut that adds to the deficit.
That's part one.
So there's no economist and save it from these tax plan and it's five trillion if I say I will not add to the deficit -- my tax plan.
I will not reduce the share paid by high income individuals.
I know that you and your running -- keep saying that I know it's a popular thing to say with a lot of people.
But it's just not the case but I -- five boys.
I'm used to people -- something that's.
Not always true but just keep on repeating it and ultimately hoping I'll believe it but that.
That is not the case all right I will not reduce the taxes paid by high income Americans.
And number three.
I will not under any circumstances raise taxes on middle income families.
I will lower taxes -- middle income families.
Now you cite a study.
There's six other studies that -- to the study you describe -- say it's completely wrong.
I saw a study that came out today that said you're gonna raise taxes by three of 4000 dollars and about middle income families for all these studies out there.
The let's get at the bottom line.
That is I want to bring down rates -- to bring the rates down at the same time -- lower deductions exemptions and credits and so forth so we keep getting the revenue we need.
And you -- then wired or the race and the reason is because small business pays that individual rate.
Of America's workers work in businesses that are taxed not at the corporate tax rate.
But at the individual tax rate and if we lower that rate.
They will be able to hire more people.
For me this is about jobs -- this is about getting jobs for the American people got.
Do you challenge what the -- I guess it would dissent that is his own plan.
Well for eighteen months -- we have been running on this tax plan and now five weeks before the election.
Is saying that as big bold idea is never mind.
And the fact is that if -- lowering the rates the way you described governor.
Then it is not possible to come up with -- -- deductions and loopholes that only affect high income individuals to avoid either raising the deficit.
Burdening the middle class it's it's match.
Now governor Romney and I do share a deep interest in encouraging small business growth so at the same time that.
My tax plan has already lowered taxes for.
98% of families.
I also lowered.
Taxes for small businesses eighteen times and what I want to do is continue.
The tax rates the tax cuts that we put in place for small businesses and families.
But I have said that for incomes over 250000.
Dollars a year.
That we should go back to the rates that we had when Bill Clinton was president when we created 23 million new jobs went from deficit to surplus.
And created a lot of millionaires to -- and the reason this is important is because.
By doing that we can not only reduce the deficit we could not only.
Encourages job growth through small businesses were also able to make the investments that are necessary in education or in energy.
And we do have a difference though when it comes to definitions of small business.
The under under my plan 97% of small businesses would not see their income taxes go up.
Governor Romney says well those top 3% -- the job creators they'd be -- But under governor Romney -- definition.
They're -- bunch of millionaires and billionaires were small businesses Donald Trump is a small business.
And I -- Donald Trump doesn't like to think of himself -- small anything but.
But that's how you define small businesses if you're doing business income and that kind of approach.
I believe will not grow our economy because it's the only way to pay for without.
Either -- middle class war blowing up our deficit.
Is to make drastic cuts in.
Things like education.
Making sure that.
We are continuing -- basic science and research all the things that are helping America -- and I think that would be a mistake.
All right Jim let me just come back and that and that point we just -- this other little businesses we're talking about -- treatment of this so everybody understands him.
We're way over our first fifteen minutes fun is that it's -- it's -- that's right.
No problem I'll get all don't have what you did Tom I don't have a problem look -- fell on the economy that we're gonna come back.
-- -- and wanna move on to the deficit and as a lot of other things to OK but Gloria so.
The event what him.
The president here -- Mr.
President your answer right which is that that with regards to 97% of the businesses are not not taxed at the 35% tax rate they're taxed at a lower rate.
But those businesses that are in the last 3% of businesses happened to employees.
Half of all the people who work in small business those of the businesses that employ one quarter of all the workers in America.
And your plans to take their tax rate from 35%.
Thought I talked to a guy who has a very small business he's the electronics business -- -- in Saint Louis -- for employees.
He said he and his son -- -- -- how much they pay in taxes.
Federal income tax federal payroll tax state income tax state sales tax state property tax gasoline tax it added up to well over 50%.
Of what they earned.
And your plan is to take the tax rate on successful small businesses from 35%.
The National Federation of Independent Businesses has said that will cost 700000.
I don't want -- cost jobs my priority is jobs.
And so what I do as I bring down the tax rates lower deductions and exemptions the same idea behind Bowles Simpson by the way get the rates down.
Lower deductions and exemptions to create more jobs because there's nothing better.
For getting us to a balanced budget.
That having more people working earning more money pay more taxes that's by far the most effective and efficient way to get this budget balanced.
Jim you may want to move onto another topic but I I would disservice to the American people if you believe that we can cut taxes.
Like five trillion dollars.
And add two trillion dollars in additional spending.
That the military is not asking for seven trillion dollars just to -- sense over ten years that's.
More than our entire defense budget.
And you think -- by closing loopholes and deductions for the well to do some how you will not end up.
Picking up the tab then.
The governor Romney's plan may work for you but.
I think -- common sense and our history.
Shows us that's not a recipe for job growth -- look we've tried this we've tried both approaches.
The approach the governor Romney's talking about is the same sales pitch that was made in 2001 and 2003.
And we ended up.
With the slowest job growth in fifty years.
We ended up moving from surplus to deficits.
And get it all culminate in the worst financial crisis since the Great Depression.
And Bill Clinton toward the approach that I'm talking about we created 23 million new jobs we went from deficits to surplus.
And businesses did very well.
So in some ways we've got some data on which approach is more likely to create jobs and opportunity for Americans.
And I believe that the economy works best when middle class families are getting tax breaks so that they've got some money in the pockets.
And those of us who have done extraordinarily well because of this magnificent a country that we live in that.
We can afford to do a little bit more to make sure we're not blown up.
The deficit Jim segment the -- the president again this segment so I think I get the last word.
So I had to take gonna get the current -- -- -- but nobody gets a first for that site but I get the -- for -- and I hope let me just make this happen.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- My plan is not to put in place any tax cut the lead to the deficit that's point one so you may keep referring to with a five trillion dollar tax cut but that's not my plan.
Number two let's look at history.
My plan is not like anything that's been tried before.
My plan is to bring down rates but also bring down deductions and exemptions or credits at the same time so the revenue stays -- But that we bring down -- to get more people working my priority is putting people back to work in America they're suffering in this country.
And we talk about evidence.
Look at the evidence the last four years.
It's apps extraordinary.
We've got 23 million people out of work.
Or stop looking for work in this country.
It's just it's we got we got what the president took office 32 million people on food stamps 47 million in food stamps today.
Economic growth this year slower than last year and last year -- than the year before.
They're going forward with the status quo is not gonna cut it for the American people who are struggling today.
Let's talks -- on.
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