Presidential Candidates Spar Over Role for Regulation

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In debate, Obama and Romney disagree on how much regulation is needed.

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The first presidential debate between President Obama and GOP candidate Mitt Romney showed the two candidates disagreeing sharply over how much and what kind of federal regulation will help the economy grow the most. Although both agreed that, as Romney put it, “[r]egulation is essential,” they presented opposing views on the appropriate ways to regulate the financial sector, health care, energy, and international trade.

With the focus of last night’s debate being on the economy, much of the debate touched, either directly or tangentially, on regulation. Questions about job creation and debt reduction brought out the candidates’ contrasting proposals for tax reform, which have already garnered significant media coverage. The candidates also discussed their views on entitlement reform, with President Obama declaring that they have “a somewhat similar position” on Social Security.

However, one of the most telling moments of the debate came when the moderator asked the candidates for their views on the level of federal regulation in today’s economy. Obama declared that “it appears that [they have] got some agreement that a marketplace to work has to have some regulation.” Romney responded that while he agrees that  “good regulation” is needed to support a functional free-market economy, government rules can become excessive and have “unintended consequences.”

On financial regulation in particular, Romney condemned the Dodd-Frank Act as “harmful to the economy,” arguing that the Obama Administration has wrongly protected certain banks as being “too big to fail” and has unduly delayed clarifying key terms used in the law.

President Obama, by contrast, faulted Romney for proposing to repeal Dodd-Frank and attempting to continue what he characterized as a culture of deregulation in the financial sector.

A similar exchange occurred over Obamacare, with Obama defending one of his landmark pieces of legislation and Romney vowing to repeal it.

Other areas of regulation saw more subtle differences. For example, on energy, while both candidates argued that America should boost its domestic energy production, Obama spoke of the need to develop all sources of energy, including nonrenewable ones, whereas Romney focused more on domestic oil and natural gas production and improving the business climate for what he called “clean coal.”