Political pundits continue to see tomorrow’s presidential election as a tossup. The national polls vary slightly, but most agree that when considering the margin of error, the race between President George W. Bush and U.S. Sen. John Kerry is a virtual dead heat.
It’s just as difficult to predict the type of impact either candidate will have on the national and local economy.
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Rhode Island executives say there will certainly be change – from interest rates to tax policy – but underlining issues related to the war in Iraq and a growing national deficit present unknowns for both a Bush or Kerry White House.
If anything, people are looking forward to hearing a clear economic plan absent campaign rhetoric.
“Bush’s and Kerry’s inability to project a clear path to the future not only breeds uncertainty for all Americans but immobilizes both the economy and people’s confidence in a better future,” said James Nuzzo, president and CEO of Nuzzo Defining Surfaces, a retail showroom of surfacing materials in Exeter.
Nuzzo added, “Hopefully whoever is the winner of the election will share with all Americans a much needed comprehensive understanding of where the country is headed and by what means we’re going to get there.”
How effective Bush or Kerry could be over the next four years depends heavily on the country’s policy on Iraq and a ballooning deficit.
“I think that there are genuine concerns about our role in the world, about the implications financially of the election, and also in terms of relations with other countries, with Iraq,” said Merrill W. Sherman, president and CEO, Bancorp Rhode Island.
Michael Giuttari, president of NAI MG Commercial Real Estate in Providence, is anticipating a post-election interest rate hike, which will surely jolt the real estate market.
“I think people will be more comfortable in making decisions with their real estate, and many of these decisions will be based on the interest rates post-election,” he said. “The feeling is that rates will rise and slow down the buying, but that will boost the lease market.”
Giuttari’s colleague Sheldon Rodman, president of Rodman Real Estate in Providence, said how the Rhode Island commercial real estate market fares in the next four years might have a lot to do with the administration’s treatment of manufacturing.
“This state having a manufacturing base has been severely affected by the China Syndrome, so anything the government can do to help manufacturing will help commercial real estate” in keeping companies here in Rhode Island, Rodman said.
When it comes to the future of manufacturing, business leaders in that sector see Kerry as a friend.
“Manufacturing as an industry would probably have a better support system under Kerry than Bush, based on their track records. Global trade, policies and competition wouldn’t change,” said John Cronin, CEO of the Rhode Island Manufacturing Extension Services.
He pointed to a Bush budget that cut funding to the Manufacturing Extension Partnership, a resource for small- and medium-sized manufacturers.
But, Cronin was also quick to note that four more years of Bush military spending is a good thing as well. Rhode Island is deeply affected by government investments in defense, Cronin said, and increased or lessened focus on defense could impact the local companies like General Dynamics/Electric Boat and Raytheon.
While improving trade policy and government contracts are key, the biggest problem facing manufacturing and all business, for that matter, is health care costs.
“Health care is impacting every business and manufacturing especially, and (certain) policies will have a negative impact as health care costs continue to rise,” said Joseph Cannon Jr., president of East Greenwich-based CAS America. “All of the work we do in lean manufacturing and education is continually being eroded by infrastructure costs, and one of those is health care.”
Rhode Island health care experts thought the issue was lost in the race for the White House.
“I think a year ago, all the polls suggested that health care would be at the top of the agenda in the campaign, but war and terrorism changed those priorities, and it’s not even the top domestic issue right now – it’s second to the economy. So it hasn’t received the attention we would like from either candidate,” said Edward J. Quinlan, president of the Hospital Association of Rhode Island
Quinlan said a fear that hospitals have right now is that the national deficit growth over the last several years is going to force either president to deal with the deficit in a significant way.
“In 1997, when the Congress last aggressively moved to balance the budget, they did it largely through Medicare, on the backs of hospitals and physicians,” he said.
Dr. Fredric V. Christian, president of the Rhode Island Medical Society, said the candidates have contrasting plans for providing health care to all citizens.
“Kerry’s plan would use the federal government to increase the number of insured, especially the poor, and would cover about 27 million people at a cost of over $600 billion over 10 years. Bush, on the other hand, has a more modest proposal of bringing in 2.5 million at a cost of $90 billion.
“The Bush plan emphasizes more the private sector; he’s proposed expanding health savings accounts, tax credits to help small businesses. I don’t want to endorse one program over the other, but I think our goal should be for true universal access,” he added.
Christian said the proportion of the population without insurance is higher now than it was 25 years ago.
Christian said he believes physicians have a distrust of U.S. Sen. John Edwards as a trial/malpractice attorney, and that may have an impact upon the physician vote.
“On the other hand, Bush has been very much a proponent of (tort reform). But despite having a Republican Congress for the past four years and a Republican president, we have been unable to pass national liability reform because of the Senate.”
