Obama adviser talks trade

'Protectionist' label inaccurate, economist tells Denver chamber

By David Milstead, Rocky Mountain News (Contact)

Published August 28, 2008 at 12:05 a.m.

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Austan Goolsbee, one of Barack Obama's top two economic advisers, said Wednesday that labeling the candidate as protectionist on free trade issues is "totally not accurate."

Obama is gaining the backing of most major unions and has been a voice in the debate over whether the North American Free Trade Agreement needs to be reworked.

Goolsbee, a professor of economics at the University of Chicago business school, made his case for the candidate Wednesday morning before a not-necessarily-friendly audience at the Denver Metro Chamber of Commerce.

Obama has said trade is good for the economy, access to foreign markets is critical for American business and trade has helped keep prices low. At the same time, Goolsbee said, Obama recognizes that millions of people have not benefited from trade because of stagnant income or lost jobs.

"If we're not mindful of their concerns, all the political good will toward trade will evaporate," he said.

Goolsbee said the Obama economic message on both short-term and long-term investment in the country is getting through, but a third message - fiscal responsibility - "needs some work."

Republicans, Goolsbee said, are painting Obama as a tax-and-spend liberal, much as they've described most Democrats over the past few decades. Goolsbee said the Obama tax plan calls for tax cuts for families earning less than $150,000 and increases for households above $250,000.

The net tax cut will be paid for simultaneously by net spending cuts, Goolsbee said, and Obama plans to cut the annual deficit.

He contrasted this with Republican John McCain's plan to cut taxes by $4 trillion "above and beyond" current tax cuts and said McCain hasn't said what spending he'd cut to pay for the cuts.

The Tax Policy Center, a joint venture from the Urban Institute and the Brookings Institute, says both the Obama and McCain tax plans would increase the national debt by billions of dollars over the next 10 years, and "neither candidate's plan would significantly increase economic growth unless offset by spending cuts or tax increases that the campaigns have not specified."

Finance Editor David Milstead can be reached at milstead@RockyMountainNews.com or 303-954-2648.

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