With the presidential election coming up, we asked two seasoned political writers to break down the case for which candidate would most benefit architects and other design and construction professionals—Jemelle Bouie of The American Prospect defending the Democratic ticket of Barack Obama and Joseph Biden, and Philip Klein of The Washington Examiner defending the Republican ticket of Mitt Romney and Paul Ryan. (In true debate style, we also gave Bouie and Klein the opportunity for a rebuttal to each others’ cases. Check back tomorrow to read those.)
Below, we begin first with Bouie’s defense of the incumbent. Klein’s defense of the challenger begins on the next page.
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A Vote for Obama/Biden
By Jamelle Bouie
So far this year, a lot of pundits have wasted a lot of digital ink on the idea that this is an unusually high-stakes election. Commentators say this for every election, and most times, they’re wrong. But, at the risk of sounding cliché, even a stopped clock is right twice a day, and in this case the pundits are on point.
But if this is an important choice for the public writ large, then it’s a critical one for architects. As a profession, architecture has been in a tough spot for the last four years. Compared to other workers with college and graduate degrees, architects were hit hard by the housing bust and financial crisis—unemployment for experienced architecture college graduates is 9.2 percent, according to the American Community Survey, compared to 4.1 percent for college grads as a whole.
A critical choice, though, doesn’t have to be a tough one, and if one looks at recent public policy, it’s clear that the profession would be best served by a continuation of the path set by the Obama administration.
Since entering office in 2009, President Barack Obama has pursued a series of tax measures to benefit small businesses. The stimulus, the Hiring Incentives to Restore Employment Act, and the Small Business Jobs Act included tax exemptions for key investments, tax credits for hiring out-of-work Americans, greater deductions for startup costs, capital-gains tax cuts, and a measure that raised the small-business expense limit to $500,000.
The Affordable Care Act is another measure that benefits small architecture firms. Under the law, businesses with more than 50 employees will have to provide insurance to their employees—or face a penalty. Of course, this exempts most architecture firms, the large majority of which employ fewer than 10 people. Those firms—and the people they employ—will have the opportunity to purchase insurance off of the regulated markets established by Obamacare, where insurers will compete with each other for customers on the basis of price. The hope is that this will lower costs and make it easier for small-business owners to provide a key benefit to their employees. Businesses that take this step will receive a tax credit to help cover the cost.
On the other hand, Obama has promised to raise taxes on high earners in his second term, and there’s a real worry that this will affect small-business owners and middle-class workers. But the good news is that, according to the nonpartisan Joint Committee on Taxation, just 3.5 percent of small-business tax filers—or 940,000 individuals—would pay a higher rate. Another analysis, from the left-leaning Center on Budget and Policy Priorities, notes that only 2.5 percent of small-business owners who are taxed at individual rates—a somewhat smaller pool of people—fall into the top two income brackets. Given architects’ median income of $72,550—according to the Bureau of Labor Statistics—odds are good that most architects will see little change in their tax burden.
There’s also the issue of the architecture students and graduates who have been hit hard by high tuition costs and a sluggish economy—at a time when average in-state tuition and fees for bachelor programs in architecture have increased by 3.4 percent to $20,115. (For graduate programs, the increase is closer to 2 percent.) The Obama administration has recently moved forward with a program that would ease the burden on those struggling to repay federal student loans. The Income-Based Repayment Plan would allow borrowers to cap their student-loan payments at 15 percent of their discretionary income. And for the long-term, it has proposed a “Race to the Top”–style program for higher education to reward schools that lower tuition costs and boost value.
Other than a few references to cutting taxes for small businesses or helping out students, you won’t hear much about these policies from Obama on the trail. But they are all concrete steps that will continue if he’s elected to a second term, and might even expand if he can get congressional support. That’s what happens when you elect a president who sees a role for government in the maintenance of the economy.
This isn’t to say that the administration has been perfect for the architectural field; to wit, its lackluster response to the housing crisis has been tough for architects, whose fortunes are tied tightly to the performance of the housing market. But on a whole host of other concerns, the Obama administration has proven beneficial. This is especially true for the roughly 21 percent of architects who the IRS reports are self-employed.
It’s possible that Gov. Mitt Romney will see a need to pursue similar policies to Obama if he’s elected president. After all, he built his fortune as a sensible businessman who took wise advantage of benefits provided by the government. But, it’s also true that he’s the leader of the Republican Party, which has little interest in government as a proactive tool for improving the economy.
And while the president isn’t bound by the beliefs of his party, he is strongly influenced by them. A vote for the status quo isn’t inspiring. In this case, though, it’s the best bet for an economy that works for both architects and all workers.
Click to the next page to read Philip Klein's defense of the Romney/Ryan ticket.
To read Bouie's rebuttal of Klein's argument, click here.