Gyory: It's the economy, candidates

The campaigns of both President Barack Obama and former Gov. Mitt Romney have been busy launching attack ads. But leveling with the American people about the economy's hard truths is a political necessity right now. The Great Recession left too many stubborn scars.

This economic downturn led to the loss of 8.8 million jobs, and the Obama administration's policies recovered only 3.8 million of them. Mitt Romney's plan is virtually identical to the economic policies of former President George W. Bush, which neither prevented Wall Street's collapse, nor stemmed the huge job losses that followed. The public senses that neither party's policy reflexes will alone generate a true recovery.

The recession technically ended in 2009, but the decline in median household income accelerated in 2010. From 2001 to 2009, median family income declined by 4.8 percent, erasing a decade's income gain. In the housing market, $7 trillion in value was wiped out from its peak in 2006. The lost decade left the middle class sullen about politics and suspicious of both parties.

Polls show Americans still want job-growth policies that work quickly. What they crave is a president who can implement that package.

But the next president's term could crash before it truly begins. As it stands now, the Bush tax cuts will expire in January, and the process for mandatory cuts to domestic and military spending will kick in then, too. The next president will need a mandate to avoid paralysis -- paralysis that would inevitably wreak havoc on the job, housing and equity markets -- and that means the candidates need to present clear economic plans before voters head to the polls in November.

The economic lesson of the 1990s is that ending deficits requires a tripod of spending cuts, increased revenues and economic growth. The political lesson is that only compromise can bring about that balance. President George H.W. Bush broke with his party and forced through deficit-cutting tax increases, enabling his successor, President Bill Clinton, to compromise with the Republican Congress to enact significant cuts. The result in the 1990s: Surpluses replaced deficits and growth replaced recession.

Politically creative presidents can vault over logjams. The country now needs a grand bargain: a ratio of cuts to revenue at 4-1 or 5-1, to get the nation's debt and deficit under control. Regardless of the Senate vote Wednesday, the Obama campaign should avoid the trench warfare over ending the Bush tax cuts only for those earning less than $250,000, and instead focus on recreating public support for the kind of bipartisan tax reform President Ronald Reagan achieved in 1986 -- lowering rates across the board, while closing loopholes, netting greater revenues.

Additionally, the next president cannot ignore states and their localities in crafting federal policies, precisely because cascading fiscal crises will extinguish the flickering national recovery. The State Budget Crisis Task Force, led by former Lt. Gov. Richard Ravitch and former Federal Reserve chairman Paul Volcker, issued a sobering report last week, showing the desperate need for greater planning, transparency and fiscal prudence from state governments. Kicking the can down the road is no longer an option. If states and localities are fiscally crippled, we will miss the opportunity to reclaim both educational excellence and the infrastructure improvements so essential to long-term growth.

So far, neither Obama nor Romney has come out of his partisan comfort zone -- and if that continues, no mandate will emerge. Reaching for a mandate is risky, but if last summer's debt-ceiling dysfunction returns this January, the next president's term could be a bitter one.

We need at least one candidate to boldly step away from narrow partisanship. If not, events will overtake those who resist this rendezvous with responsibility. Let both President Obama and Gov. Romney ponder that this summer, as they prepare to ask a troubled nation for its votes this fall.

Bruce N. Gyory is a consultant with Corning Place Communications and an adjunct professor of political science at the University at Albany.