Obama vs. 2012 Republican Candidates: Who Has the Better Plan for the U.S. Economy?

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It is widely believed that a key part of Obama's speech will call for an extension of the temporary payroll tax cut, as the president has consistently said that it will boost the economy by giving families a little more money to spend. Last year, the White House and Congress agreed to a temporary payroll tax cut, with only 4.2 percent of a paycheck allocated toward Social Security (up to $106,800 annually) instead of the usual 6.2 percent. The president may also call for an extention of the employee rate to employers, who currently chip in another 6.2 percent

Throughout his presidency, Obama has pushed for a tax increase on individuals making over $200,000 a year and for families making over $250,000, but the proposal has not gained momentum. Obama argues that the wealthy have not sacrificed their fair share in this economy, while the lower-, working- and middle-classes have suffered a great deal. Obama supporters believe that continuing tax cuts for the wealthy will not benefit the economy much because the affluent most likely will save the money rather than spend it.

To deal with our country's debt, Obama has agreed to a large swath of spending cuts, to the ire of the liberal wing of his party. In the U.S. debt deal signed a few weeks ago, Congress, after reaching bipartisan agreement on the roughly $900 billion in debt reduction, appointed a super committee to identify about $1.5 trillion in additional budget savings before Thanksgiving. If a deal is not reached, automatic cuts go into effect in a wide variety of government programs.

Although the verdict is still out on whether these cuts will boost the economy years down the road, in the near-term, massive spending cuts and government layoffs -- fiscal austerirty -- probably won't yield too many jobs.

Republican Candidates

With the exception of Jon Huntsman, the Republican candidates have not announced formal job plans. To-date, the differences between the Republican candidates for president pertain more to style than substance, with the candidates focusing on three core issues: Cut taxes, cut spending, cut regulations. Let's break each down.  

Taxes:  A core piece of the Republican economic agenda has been to cut taxes or maintain low taxes. For example, Huntsman, who recently announced his jobs plan, called for eliminating taxes on capital gains and dividends, lowering the business tax rate and instituting a tax holiday. It is safe to say that other Republican candidate plans are not much different.

In terms of tax hikes on the wealthiest, Republicans say that would increase taxes on America's "job creators," thus hindering  economic growth. They have run with the theme that the U.S. Government has a spending problem (see below) and not a revenue problem.

However, the "no new taxes" mantra comes with a caveat. Although Republicans haven't touted their opposition to a payroll tax cut extension, they aren't supporting this tax cut like they are for tax cuts on dividends, capital gain, and estates. Republicans have quickly pointed out recent studies saying that nearly half of American's don't pay income tax. Some have called for these Americans to pay more, "even if it's only a dollar," according to Michele Bachmann.