Last night, as the candidates faced off in the first presidential debate, The Real Deal was taking notes on candidates’ positions on mortgages, the housing industry, taxes, and whether Donald Trump qualifies as a small business.
President Barack Obama said raising taxes on the top 3 percent of businesses would spur growth, without hurting education funding. Meanwhile, the former Massachusetts Governor Mitt Romney said raising taxes on that group would kill job growth. The candidates also sparred on the merits of the Dodd-Frank Wall Street Reform and Consumer Protection Act, a law enacted by the Obama administration in response to the collapse of Lehman Brothers and the country’s ensuing financial troubles.
Early in the debate, Romney said Dodd-Frank‘s regulations weren’t clear enough to regulate the mortgage industry while promoting growth.
You say we were giving mortgages to people who weren’t qualified. That’s exactly right. It’s one of the reasons for the great financial calamity we had. And so Dodd-Frank correctly says we need to have qualified mortgages, and if you give a mortgage that’s not qualified, there are big penalties, except they didn’t ever go on and define what a qualified mortgage was. It’s been two years. We don’t know what a qualified mortgage is yet. So banks are reluctant to make loans, mortgages. It’s hurt the housing market because Dodd-Frank didn’t anticipate putting in place the kinds of regulations you have to have. It’s not that Dodd-Frank always was wrong with too much regulation. Sometimes they didn’t come out with a clear regulation.
But Obama pointed to Dodd-Frank as a massive effort to curb lenders’ missteps and questioned Romney’s previous claims that he’d scrap the law.
And, you know, I appreciate and it appears we’ve got some agreement that a marketplace to work has to have some regulation. But in the past, Governor Romney has said he just want to repeal Dodd- Frank, roll it back. And so the question is: Does anybody out there think that the big problem we had is that there was too much oversight and regulation of Wall Street? Because if you do, then Governor Romney is your candidate.
On job creation and small businesses, the President questioned whether Romney’s proposed definition of a small business would include millionaires like Donald Trump.
Under under my plan, 97 percent of small businesses would not see their income taxes go up. Governor Romney says, well, those top 3 percent, they’re the job creators, they’d be burdened. But under Governor Romney’s definition, there are a whole bunch of millionaires and billionaires who are small businesses. Donald Trump is a small business. Now, I know Donald Trump doesn’t like to think of himself as small anything, but — but that’s how you define small businesses if you’re getting business income. And that kind of approach, I believe, will not grow our economy, because the only way to pay for it without either burdening the middle class or blowing up our deficit is to make drastic cuts in things like education, making sure that we are continuing to invest in basic science and research, all the things that are helping America grow. And I think that would be a mistake.
Gov. Romney defended his tax plan, firing back back that raising taxes on Trump would hurt job growth.
Well, the economy is still growing slow. As a matter of fact, it’s growing much more slowly now than when you made that statement. And so if you believe the same thing, you just don’t want to raise taxes on people. And the reality is it’s not just wealthy people — you mentioned Donald Trump. It’s not just Donald Trump you’re taxing. It’s all those businesses that employ one-quarter of the workers in America; these small businesses that are taxed as individuals. You raise taxes and you kill jobs. That’s why the National Federation of Independent Businesses said your plan will kill 700,000 jobs. I don’t want to kill jobs in this environment.
[NPR Transcript] — Jane C. Timm