1. "I'm powerless to change the economy."
When Americans head to the polls this month, political analysts say the economy is going to be issue number one. Although President Barack Obama and Republican candidate Mitt Romney have differing views on how to add spark to the recovery, the man chosen for the job will likely have very little influence on the direction of the economy, experts say. The shrinking labor force and the globalization of certain industries, along with other, unpredictable events, will have more of an impact on the economy in the long run than, say, the president's proposals for energy or small business lending, says Eugene Steuerle, a senior fellow at the Urban Institute, a think tank in Washington D.C. "There are a lot of economic forces that are basically outside of their control," he says.
Smartmoney reporter Jonnelle Marte discusses some things that presidential candidates won't say with The Wall Street Journal This Morning's Gordon Deal. (Listen here).
One example: As more baby boomers retire and the workforce potentially shrinks -- a trend the president can do little to change -- output is likely to decrease and government spending on health-care programs for seniors will probably go up. Together, that could drag down the U.S. economy, says Steuerle. That's not to say a president's policies don't have some influence over short-term economic trends. By pushing for temporary tax breaks, extending unemployment benefits, propping up struggling corporations and using other stimulus measures, economists say presidents can stop some economic strains from worsening.
This story has been updated; it originally ran on May 29, 2012.
2. "It's getting more expensive to win you over."
It used to be that candidates kept their campaign spending to a minimum in order to qualify for matching public funds from the federal government. To get matching funds, candidates have to stick to a 2012 national spending limit of about $45.6 million in the primaries and $91.2 million in the general election. They may also spend no more than $50,000 of their own money in each phase.
But starting in 1996, when candidate Steve Forbes refused to take public funds in order to use more of his own money than the limit allowed, more candidates have stopped taking matching funds out of fear of being outspent by an opponent. In 2008, President Barack Obama became the first candidate to refuse public funds for the general election. He went on to raise about $750 million for the primaries and the general election combined. "I don't think we're going to go back to a time when candidates accept those general election rules," says Nathan Gonzales, deputy editor of the Rothenberg Political Report, a non-partisan newsletter covering campaigns and elections. "It seems likely that one side will exceed those [limits] and the other side won't want to be hamstrung."
As of late October, President Obama had raised $632 million and Mitt Romney had collected $389 million, according to the Center for Responsive Politics. Compare that with 1996, when Bill Clinton and Bob Dole faced off with a budget of about $35 million each. Candidates are courting wealthy supporters and small donors alike. This election, 34% of President Obama's total came from people who gave $200 or less, compared with 18% for Romney, according to the center. That said, donors -- big and small -- are supporting presidential candidates on their own accord, Gonzales points out: "No one is forced to give."
A spokeswoman for Mitt Romney declined to comment for this article. Reps for President Obama did not return calls seeking comment.
3. "You can't skip the campaign commercials."
Television ads are still the most popular way of getting a message out to voters, but as more people zoom past commercials by using their DVR, or stream their favorite shows online, candidates have had to get more creative. As a result, presidential hopefuls are increasingly turning to online tracking tools, social networking sites and online video to target specific demographic groups for votes and donations. "Candidates are using social media in ways they never have before," says William Rosenberg, a political science professor at Drexel University
For instance, both parties are using online search ads, which analyze a person's Web browser history, to determine if they are likely to vote Republican or Democrat. Then, they hit up their most likely voters for money, says Rosenberg. Candidates are increasingly using social media sites like Facebook and Twitter to ask for donations, energize supporters and announce campaign events. Indeed, spending on Internet media is taking off: Obama's reelection campaign spending on social media, online advertising and website maintenance totaled $53.7 million by mid-October. That's nearly three times the amount he had spent by the same time in the 2008 election, according to the Center for Responsive Politics. Romney has spent $15.1 million, compared with the $4.6 million John McCain used up by this time back in 2008. Separately, the Obama Victory fund, which fundraises for the Obama Campaign, the Democratic National Committee and state Democratic parties, spent $26.8 million on online fundraising, and the Romney Victory fund has spent $21 million on the same category, according to the center. "You have to get more creative in order to cut through the clutter," says Paul Winn, political director at Smart Media Group, a Republican political ad-buying firm.
Candidates are still using one traditional method to court voters and donors -- the telephone. The Do Not Call Registry does not apply to political candidates so expect plenty of robocalls and solicitations for donations. Annoyed voters can register their landlines and cell phones with the National Political Do Not Contact Registry at StopPoliticalcalls.org.
4. "This job is going to make me rich -- one day."
For many presidents, taking the oath of office has also meant taking a pay cut. (President Obama currently makes less than most of his cabinet members, according to the Center for Responsive Politics.) But the big payoff comes after the Oval Office. Former presidents dating back to Ulysses S. Grant have used their presidential credentials to publish memoirs and land speaking gigs, but the potential payout has skyrocketed in recent years, says Barbara Perry, a senior fellow with the Miller Center at the University of Virginia, a nonpartisan institute that studies the presidency. "It has really become a money making profession," she says.
Bill Clinton, for instance, received a $15 million advance within months of leaving the presidency for his memoir "My Life."And Ronald Reagan accepted a $2 million fee to speak in Japan after he left office. Even losing candidates can cash in after the campaign is over with book deals and other public events. After her vice presidential run, Sarah Palin's memoir "Going Rogue" was a top seller. She also landed a reality TV show on TLC.
To be sure, some ex-presidents use their clout and newfound free time to do some good as well. Clinton worked with George H.W. Bush to support the communities impacted by the 2004 tsunami in the Indian Ocean and joined forces with George W. Bush to start a fund for the 2010 earthquake in Haiti. The George W. Bush Institute focuses on education reform, global health and boosting economic growth. The Clinton Foundation works to increase the availability of HIV/Aids treatments worldwide, fight climate change and support poor communities. Jimmy Carter, perhaps the most productive ex-president, went on to create the Carter Presidential Center, a foundation devoted to democracy, human rights conflict resolution and the eradication of disease in impoverished nations.
5. "I will raise taxes."
George H.W. Bush famously proclaimed, "Read my lips: no new taxes," to a cheering crowd during his acceptance speech at the 1988 Republican National Convention. But the catchy line backfired. Four years later during Bush's re-election campaign, his challenger, then governor of Arkansas Bill Clinton, attacked Bush for having gone back on his word.
Experts say most presidents since Jimmy Carter have raised taxes in one way or another. Today, with the large budget deficit looming, a candidate hoping to roll out any new programs will have to either raise taxes or cut spending in other areas, say analysts. That said, admitting that you're going to raise taxes if elected is close to political suicide for a presidential candidate, says experts. Just ask former vice president Walter Mondale, who made the following honest declaration when he was challenging then President Ronald Reagan in 1984: "Mr. Reagan will raise taxes, and so will I. He won't tell you. I just did."His statement wasn't the only reason Mondale lost in a landslide but it was likely a contributing factor, says Barbara Perry, a senior fellow with the Miller Center at the University of Virginia, a nonpartisan institute that studies the presidency. "He went down to a resounding defeat."
6. "I can't really cut the deficit."
With the U.S. Treasury expected to reach the $16.4 trillion debt limit by year end, presidential candidates are touting their ideas for cutting spending and reducing the deficit. But economists say current circumstances make it very difficult for presidents to successfully cut federal debt, especially because raising taxes is a campaign killer. President Obama is projecting increased spending of about $1 trillion over the next decade, mostly due to Social Security, Medicare, Medicaid and interest on federal debt, says Eugene Steuerle, a senior fellow at the Urban Institute, a think tank in Washington D.C.
When the economy is growing, presidents tend to have the benefit of stronger revenues because more people are working, earning higher wages and paying taxes. But as government commitments have grown, presidents have much less flexibility in their budgets, say experts. Add on to that the challenge of trying to restore some budgetary balance after the recession, says Steuerle. "Spending automatically grows faster than revenues," he says. "Now, to do anything new, presidents have to pay for it."
That often means having to cut back on public programs or raise taxes, but presidents often face huge backlash from voters when they try to make those types of changes, the way President George H.W. Bush did when he broke his no new taxes promise. Three years later, President Bill Clinton passed the Omnibus Budget Reconciliation Act of 1993, which drew controversy for raising taxes on Social Security benefits and corporate income, among other changes. Of course, a pickup in economic growth could work in the president's favor by increasing tax revenue, says Steuerle, but "there's no escape from hard choices."
7. "I'll boost stocks -- of my contributors' companies."
The next president may have an influence on your investment portfolio: Companies that make contributions to the winning candidate, along with those that benefit from the candidate's policies, tend to outperform the market in the years following the election, according to experts. A study published last November by the University of Innsbruck in Austria found American companies that made the majority of their contributions to the winner of a U.S. presidential election posted stronger gains in stock performance in the two years after an election than firms that didn't contribute. An investor with a hypothetical portfolio of the 30 companies that made a bigger percentage of their campaign contributions to the winner from 1992 to 2004 would have outperformed the S&P 500 by an average 6.6% during the first year after an election, the study found. The trend also held true for the 2008 election, when the 10 publicly traded companies whose employees gave more to Obama than John McCain outperformed the S&P 500 by an average of 17.6 percentage points in 2009. (See: Stock tips from Obama and Romney .)
The data shows that a president's policies, including the annual budget, his stance on defense and his regulation of trade and the environment, can impact a company's performance, says Jurgen Huber, one of the researchers who worked on the Innsbruck study. For example, oil companies were likely helped by President Bush's decision not to sign the Kyoto-Protocol, which commits countries to stabilizing greenhouse gas emissions, or by his decision to allow drilling in new parts of Alaska, says Huber. Clinton, who prioritized expanding computer and Internet access, received strong support from telecommunications companies.
Candidates aren't being "bought" by the contributors, says Huber. Rather it's a sign that companies tend to support the candidates they think will benefit them. And many large corporations regularly contribute equally to both candidates during presidential elections, he adds.
8. "Don't believe the polls."
Polls are the lifeblood of a presidential race. Candidates use them to show they've got the edge and drum up support from voters and donors. But experts say voters should be careful not to pay too much mind to any single poll. Differences in the ways pollsters choose their samples, pose their questions and analyze their results can yield very different results. On the Sunday before the Nov. 6 election, a poll from Pew Research showed Obama ahead by three points while a poll by CNN and Opinion Research showed the candidates are tied.
Pollsters, which often cite the opinions of "likely voters," have different methodologies for selecting those voters, says Rosenberg. Some look at all adults, others winnow the pool by looking only at registered voters, and others get even more narrow by looking only at "likely" voters. Pollsters also use different methodologies for reaching voters. For instance, some companies leave cell phone only households out of their samples. Variations in wording in questions regarding policy can also lead to different results, says Gonzales.
A look at state results versus national polls may also paint a different picture. With the majority of states already prone to supporting one party or the other, people trying to predict the final outcome might be better served by focusing on the dozen or so swing states around the country, says Gonzales. "This is a state by state contest," he says. As the election proceeds, voters might be able to tune out some of the noise by following the general trend shown by all of the major polls instead of reading too much into each individual poll, he explains. Frank Newport, editor in chief for Gallup, says poll results are likely to vary in different regions based on sampling and margin of error, and that Gallup tries to reduce variation by using large sample sizes.
9. "My campaign platform will go out the White House window."
President Obama surprised some voters and analysts when he came out in support of same-sex marriage in May. Many wondered if it would hurt or help his reelection campaign. But experts say it may simply not matter. The issues the public focuses change during the course of the election, says Gonzales. For example, after Romney chose his running mate, voters focused on Paul Ryan's credentials and how the candidates could impact Social Security and Medicare.
Once the next president is elected, it's also unlikely the issues he pushed during his campaign will be the same ones that mark his coming four-year tenure, analysts say. "There are going to be a lot of things that are very important that we have no ability to predict," says Rosenberg. He points to President George W. Bush, who never mentioned terrorism when he ran in 2000 but whose tenure was largely defined by the Sept. 11 attacks and the subsequent wars in Iraq and Afghanistan. Of course, most of these pivotal events are unpredictable, making it impossible for candidates to campaign accordingly, says Gonzales.
10. "I'll leave it to my successor to save Social Security."
Candidates often make their ideas on how to revamp Social Security a part of their stump speech on the campaign trail, but those ideas have rarely translated to changes once the person is put into office. Indeed, the last major change to the Social Security program was in 1983, when lawmakers gradually increased the full retirement age from 65 to 67 for people born in or after 1938 says Virginia Reno, vice president for income security policy at the National Academy of Social Insurance, a nonprofit, nonpartisan organization. The legislation also delayed cost of living adjustments and raised some taxes, but did not come up with a long term solution for increasing the tax revenue that goes into the program, says Reno. "Nothing has been done to beef it up a bit," she says. Those changes reduced benefits for affected taxpayers by about 19%, estimates the NASI.
The lack of action in recent history is partly because the nightmare scenario for the program -- the moment when the Social Security trust fund will be exhausted -- is decades away, says Reno. Under the current system, the program should have enough funds to cover benefits through 2033, according to the Social Security Administration. After that, tax income will be sufficient to pay about 75% of scheduled benefits through 2086. The issue is becoming more urgent as baby boomers enter retirement and the number of retirees grows at a faster pace than the number of workers, but critics say real changes may not happen until the funding shortages feel more immediate.
Presidents have also been unwilling to tackle Social Security out of fear of losing support from older voters, who resist major changes to the program as they approach retirement. "Both parties are reluctant to take on the issue," says Gonzales. "The minute one party proposes changes to Social Security the other party will immediately attack."