WASHINGTON — Now it gets interesting.

Ever since Vice President Richard Nixon’s sweaty encounter against the smooth-talking Sen. John F. Kennedy in the first televised presidential debates in 1960, the face-offs have proven crucial to who gets elected.

Voters will get their first chance tonight to see President Bush square off with Democratic rival Massachusetts Sen. John Kerry in the first of three televised debates scheduled this heated election year, which is entering its final stretch with Bush holding a small lead in most polls.

Seeing the candidates tangle over issues in the 90-minute debates is key to convincing the all-important undecideds and the so-called “persuadable” voters who are tentative about their candidate choice, said Larry Sabato, director of the University of Virginia Center for Politics.

However, it’s impossible to forecast whether Kerry, who on his feet is “strong on substance,” or Bush, who “is much stronger in making a personal connection,” has an edge, Sabato said. The narrow slice of voters who say they are undecided — accounting for less than 10 percent of the electorate in a dozen closely contested states, including the first debate’s location, Florida — is expected to decide the presidential race.

“One thing we have to realize is these so-called swing voters haven’t yet really paid attention to the election,” said Paul Herrnson, director of the Center for American Politics and Citizenship at the University of Maryland. “The issues are important. But just as important is how the candidates handle themselves, how they answer questions, and imagery and style.”

The first televised debate, at the University of Miami in Coral Gables, will focus on foreign policy, including the war in Iraq and the fight against terrorism. The candidates will be seated, according to terms negotiated by the candidates’ camps.

The next debate on Oct. 8 in St. Louis will be open to any topic and cast in a more informal town-hall format, where candidates may stand and walk about while answering questions. The last debate on Oct. 13 in Tempe, Ariz., returns to the seated format and will focus on the economy and domestic policy. A vice presidential debate between incumbent Dick Cheney and North Carolina Sen. John Edwards is set for Tuesday at Case Western Reserve University in Cleveland.

This story first appeared in the September 30, 2004 issue of WWD. Subscribe Today.

The differences between Bush and Kerry are quite stark on everything from the extent of hostilities in Iraq to the health of the economy. For officials in the greater fashion industry who’ve made their presidential preferences public, opinions on either side are also quite definite.

For example, Peter Bragdon, vice president and general counsel of Columbia Sportswear, Portland, Ore., said earlier this month that “if we ran our company the way George Bush ran this country, we’d be out of a job.

“If you want better and more affordable health care, more jobs, a cleaner environment, energy independence and restoring our respect in the world, then Kerry and Edwards are your choice,” Bragdon said, according to his prepared comments issued when 31 outdoor apparel and equipment company executives endorsed the Democratic ticket.

By contrast, Hal Upbin, chairman and chief executive officer of global apparel maker Kellwood Co., who is a Bush backer, said, “The economy is sailing along, as much as a president can influence it,” and for which he credits the Bush tax cuts. “By and large he has set the environment for the economy to continue growing, albeit at a slower pace.”

Although Upbin said his support of Bush’s policies in Iraq have dimmed since the increased hostilities there, “at this point I do think he is the better person to complete the task at hand….I don’t have enough confidence [Kerry] would do the right thing or do it any better.”

Bush and Kerry present competing philosophies about how best to spur economic growth.

“The theme that runs through President Bush’s proposals is all about letting markets work, getting government out of the way and letting consumers and business make the important choices,” said Retail Forward economist Frank Badillo, in an analysis of the candidates’ plans. Kerry “on the other hand, offers the prospect of a much more activist government that will give consumers and businesses incentives to make certain decisions, such as adding jobs or going to school.”

Kerry argues the economy is lukewarm, given its slow creation of jobs to keep pace with new workers entering the market. He cites declines in consumer discretionary income and slowing of retail sales as among the lackluster economic barometers that demonstrate the punch of Bush’s almost $2 trillion in tax cuts were short-lived.

The senator pokes at the administration’s trade and tax policies as favoring foreign imports and outsourcing of U.S. jobs, which Kerry blames on the loss of some 2.5 million U.S. manufacturing jobs, including some 350,000 in apparel and textile production, since Bush took office.

In addition, Kerry has said the President’s unilateral decision to go to war in Iraq, which the 9/11 Commission said had no ties to the 2001 terrorist attacks on the U.S., has wasted $200 billion in American taxpayer money with no plan to bring peace there. As a result, Kerry maintains the chaos in Iraq has unnecessarily created a new wave of terrorists hating the U.S., while draining military and financial resources away from the war on terror in Afghanistan and elsewhere.

If elected, Kerry’s economic plan would include:

  • Targeting double-digit annual increases in health care costs through a series of tax breaks.
  • The government underwriting catastrophic health care expenses to lower premiums.
  • Allowing individuals to buy into affordable federal employee health insurance.
  • Negotiating lower drug prices with pharmaceutical companies.

Other Kerry plans include repealing Bush’s tax cuts for households making more than $200,000. For the middle class, Kerry would continue the President’s middle-class tax cuts, set to expire by 2010.

For his part, Bush’s outlook on the economy is one of recovery, an upbeat view based in part on job creation starting to pick up since August, productivity gains and GDP growth since the spring 2001 recession. Bush argues his tax cuts, with low interest rates and inflation, pulled the economy out of its doldrums, with the recession lasting just the third quarter of 2001, when GDP fell 1.4 percent.

In addition, Bush argues his expansive policies to negotiate free-trade pacts and otherwise lower global trade barriers encourage U.S. export opportunities, furthering bolstering economic growth. While acknowledging some manufacturing job declines can be tied to low-cost import competition, Bush generally regards this transition as being part of a natural economic shift toward the creation of higher-paid jobs, in areas such as technology.

“Jobs change in a changing world,” Bush said last week on the stump.

In a second term, Bush said his economic policies would be focused on:

  • Continuing with new trade-liberalizing pacts, including efforts to lower nontariff trade barriers.
  • Lobbying Congress to make permanent almost $2 trillion in tax cuts he furthered in his first term, which range from accelerated depreciation of equipment to lower rates on investment income.
  • Eliminating the estate tax by 2010, which has been gradually lowered since 2001.
  • Reforming the federal tax code.

On the trade front, Kerry would review all existing trade pacts to ensure fairness. He would lobby Congress to repeal tax-deferral breaks for U.S. companies producing abroad for sale to the U.S. market, a move designed to discourage outsourcing. Kerry, who considers himself an internationalist and not an economic isolationist as Bush contends, would also reward companies operating in the U.S. by lowering their tax rate to 33.25 percent from 35 percent.

Kerry’s outsourcing plan, which could hit apparel producers abroad, has its critics who argue it would cause U.S. corporations to change their relationship with foreign affiliates to keep their tax status, among other avoidance mechanisms.

As for the proposal’s effects on outsourcing, “If you could make it work, would it really make a difference?” Nigel Gault, an economist with Global Insight, asked rhetorically. “It probably would not make a huge difference.”

Gary Hufbauer, a senior fellow with the Institute of International Economics, agrees with the potential tax-shifting scenario, but he said Kerry’s intentions to correct disadvantages for U.S. companies against American companies operating abroad aren’t misplaced.

However, “tax differentials are not the main reason for offshore outsourcing, nor are they the main reason for the trade deficit,” Hufbauer concluded in an analysis of the Kerry plan. He said a better attack plan would involve changing World Trade Organization rules permitting countries to levy VAT and similar taxes on international commerce.

On Iraq, Bush considers his policies to be working toward democracy there, despite escalations in violence and a dismal CIA assessment of conditions. The President argues that the toppling of Iraq dictator Saddam Hussein has made the world safer and opened a key front to fighting terror in the Middle East.

On health care, Bush would ask Congress to create tax-free health care savings accounts. Under the plan, consumers would have lower health care premiums because of lower deductibles. The accounts would be used to pick up health expenses not covered by insurance, which Bush argues would stimulate wiser health care decisions and reduce unneeded treatments.

The financial drag on business and the economy as a whole by escalating health care costs and the uninsured is a key issue cited by executives affecting bottom lines. Some 44 million Americans are uninsured and are expected this year to generate an estimated $41 billion in uncompensated treatment — 85 percent paid by federal, state and local governments — and accounting for about one-third of the total $125 billion in total U.S. health care costs, according to the Kaiser Family Foundation.

According to The Lewin Group, a nonpartisan health care consulting firm, the Kerry plan would reduce the number of uninsured by 51 percent to 24.3 million, while increasing the federal government’s costs by $1.25 trillion over 10 years. The Democrat contends that the increased federal share would be largely paid for by rolling back Bush’s tax cuts for the wealthy and by efficiencies gained by trimming health care paperwork and lower drug prices negotiated with pharmaceutical companies.

Bush’s health plan would cover 8.2 million new people, a 17 percent reduction of the uninsured, and increase federal costs by $227.5 billion, the Lewin group calculates. States would pay less health care under either plan, a reduction of $20 billion under Bush and $343.5 billion under Kerry.

For employers, under the Kerry plan spending would decrease $52.1 billion over 10 years and with Bush would decline $4.7 billion, according to Lewin, which makes no judgment as to whose proposal is better.

Just as in health care, Bush’s tax plans are focused on allowing taxpayers to keep more of their money. He argues this creates strong incentives for businesses and individuals to buy and invest. Retail Forward’s Badillo said this trickle-down philosophy was apparent in “the rebound at upscale retailers during the past two years” prompted by the reduction under Bush in the top tax rate to 35 percent from 39.6 percent for some 2.5 million households. These households accounted for more than half the benefits of Bush’s tax cuts.

However, Bush’s outlook, as well as Kerry’s tax and governing plans, don’t adequately attack the ballooning federal deficit, now at $422 billion, according to several nonpartisan economists. They see the widening deficit as a millstone around the economy, which if not addressed will trigger high interest rates to keep pace with paying on what’s essentially a loan issued the government.

Both Kerry and Bush said their plans would halve the deficit in five years — Kerry by urging Congress to follow pay-as-you-go budget rules used in the Nineties to eliminate the deficit and Bush by curbing government discretionary spending.

Whether under Kerry’s or Bush’s plan, projected federal deficits “will be approximately equal,” concluded Mark Zandi, chief economist with economy.com, in an analysis of the candidates’ tax proposals.

Global Insight’s Gault added, “Neither one of them is facing a widening budget gap.”