The economy will loom large in tonight's discussion, not to mention in the decision that the voters will make in just over a month. Each side has its strengths and its weaknesses: One has begun to implement an expensive health care reform plan, the other is endorsing expensive tax cuts; one promises to protect the middle class, the other is calling on the rich to practice "economic patriotism." Yet, for all their differences, the two men face the same problem -- a growing deficit that could potentially threaten America's solvency.
In other words, Obama and Romney will both have to balance their desires to be Santa Claus with a little bit of Scrooge, finding cuts or tax increases to pay for their pet programs. How they explain the way they expect to balance these out may well determine the outcome of tonight's debate, and of the election. Here are a few ways that they may navigate the rocky shoals of their potentially unpopular budget decisions.
Medicare looms large in the federal budget: In 2010, it accounted for 15.1% of it, and it's predicted that spending on the program will balloon to $949 billion -- 17.4% of the budget -- by 2020. As average life expectancy rises, more people become eligible for the program, and health care spending increases, turning Medicare into a threat to the federal government's fiscal stability.
However, it's extremely popular: 59% of voters don't want it to change. Balancing the rising costs of Medicare with the voters' wishes is one of the biggest challenges that Obama and Romney face.
• What Romney Might Say: Romney has repeatedly made the claim that the president plans to cut $500 billion out of Medicare to help pay for Obamacare. This is a promising tactic for him, as it pits the elderly -- a politically-active group well-known for its high voter turnout -- against younger voters who are not as familiar with Medicare and who are less likely to vote. Romney will, in all likelihood, seek to drive home this message in tonight's debate.
• What Obama Might Say: Obama and his surrogates have argued out that their budget proposal, which is designed to cut costs by reducing fraud and increasing efficiency, would not cut Medicare, but rather would slow the program's growth over the next 10 years. Medicare's budget will actually continue to grow, but will do so at a slower rate, resulting in $500 billion less in spending than would be the case under the current trajectory. The trouble is that, this intricate, precise explanation plays to Obama's tendency to be wordy and confusing.
One tack Obama has taken has been to attack Paul Ryan's proposed budget, which would cut the government's contribution to Medicare. The trouble is -- as Romney has pointed out -- that Ryan is on the bottom of the ticket, and his proposed budget differs from Romney's.
• Pitfalls: Romney's attack on the subject of Medicare is sharp, pithy and powerful, while Obama's defense is likely to be wordy, confusing and abstruse. If Obama brings up Ryan's budget, he will play into Romney's hands, giving the former governor a strong opening that he is likely expecting and could easily deflect. Unless the president can find a way to explain his program clearly and briefly, the Medicare question could cost him votes.
Defense spending is another big-ticket item, particularly in light of the two wars that America is currently fighting. Right now, it accounts for a stunning 20% of the federal budget, putting it in a tie with Social Security as the biggest government expenditure. On the other hand, defense -- like Medicare -- is extremely popular, and cuts to it come with a steep political cost.
• What Romney Might Say: Currently, the 2013 defense budget is set at $525.4 billion, or 3.5% of GDP. Romney has proposed increasing it to 4% of GDP. Given the recent attacks in Libya and Egypt, this should be an easy sell, and would give the Republican contender a nice opening to criticize Obama's handling of the recent disturbances in the Middle East, an topic on which the president's choices have been unpopular.
• What Obama Might Say: In his 2013 budget, Obama proposed significant cuts to defense, including procurement, military construction and personnel. In the past, Obama has also endorsed sharp cutbacks in the size of the Army and Marine Corps. Even so, he has come out against the 9.4% to 10% sequestration cuts that the Pentagon will face if the country goes over the fiscal cliff. Caught between his own calls for measured cuts and the devastating budget slash that looms ahead, the president is in a difficult rhetorical position that could make it hard for him to convey a coherent message.
• Pitfalls: Like his Medicare proposal, Romney's position on defense is simple and pithy, while Obama's is complicated, wonky and confusing. The president's previous attempts to shift responsibility for sequestration onto congressional Republicans have appeared weak and hard to follow. If he hopes to turn the idea of defense cuts to his advantage, he will need to find a clear, coherent and -- most importantly -- brief way to make the case.
Cuts to Everything Else
Three budget items -- Medicare, Social Security and defense -- get most of the government's money, not to mention the public's attention. The rest of the federal budget -- programs ranging from student loans to transportation to food inspections -- often get less press, despite the fact that they have far more impact on most voters. Obama and Romney's ability to realistically discuss cuts to these programs without alienating voters will be a key to the upcoming election.
• What Romney Might Say: Given his vulnerability from his lack of budget specifics, one productive route for Romney would be to go on the attack. Obama's proposed budget is full of details, which gives Romney a fair bit of ammunition -- earlier this year, the president suggested big cuts in Defense, Labor, NASA, the Department of the Interior, Homeland Security, and several other popular programs. While Romney is himself endorsing deep budget cuts, his vagueness, combined with Obama's record, gives him an opportunity to sting the president. If Romney can make the case that Obama's cuts could potentially undermine the country, he could score some points.
• Pitfalls: Romney's stress on the need for fiscal restraint, combined with his refusal to offer specific budget cuts, puts him in an awkward position. While his lack of specifics gives him a good opportunity to attack the Obama's proposals without being tagged in return, it also may make him appear ill-prepared and unpresidential.
Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at email@example.com, or follow him on Twitter at @bruce1971.