Original Link: http://www.thefiscaltimes.com/Articles/2011/11/04/Romneys-500-Billion-Tea-Party-Pledge.aspx
By JENNIFER DEPAUL
In a bid to win Tea Party backing, Republican
presidential hopeful Mitt Romney offered a fiscal plan Friday that would slash federal spending
by $500 billion during his first term as president, including cuts to the
lightning rod issue of Medicare. But the proposed cuts may not be deep enough
for Tea Party activists, who support more radical spending cuts to curb the
ballooning federal debt.
During a speech in Washington to the Tea Party-allied Americans for
Prosperity, the former Massachusetts governor promised to privatize parts of Medicare, the health-insurance program for
the elderly, and gradually raise the retirement eligibility age on Social
Security. Calls to make significant changes to Medicare and Social Security are
likely to be among the most highly contentious issues of the 2012 presidential
Romney said he would bring federal spending as a share of gross domestic
product down from last year’s “staggering” 24.3 percent to 20 percent or below,
which would require approximately $500 billion in spending cuts by 2016. “We
cannot with moral conscience borrow trillions of dollars that can only be repaid
by our children,” Romney said. “We cannot so weaken our economic foundation that
we jeopardize our ability to preserve freedom.”
Romney’s Medicare proposal is similar to House Budget Committee Chairman Rep.
Paul Ryan’s, R-Wis., budget plan announced last spring. It would give seniors
limited cash grants to buy private insurance plans. Romney’s “goal is for
Medicare to offer every senior affordable options that provide coverage and
service at least as good as what today’s seniors receive,” a campaign fact sheet
In an interview with The Washington Post, Ryan said he was pleased with
Romney’s spending and entitlement reform plan. “This is a great development. It
shows that the elusive adult conversation is taking place, but all on one side,”
Ryan also praised Romney’s plan to turn Medicaid into a block grant, cut the
federal workforce, and enact far-reaching entitlement reforms. “This tracks
perfectly with the House budget,” Ryan said.
Earlier this year Ryan released a controversial budget plan that would eliminate nearly $6
trillion in spending, cut $4 trillion from revenue yet keeping all the Bush-era
tax cuts for the next 10 years. Overhauling Medicare and Medicaid were key
features to the plan.
The Center for American Progress (CAP), a progressive public policy think
tank, said Romney’s plan is more damaging to the middle class than Ryan’s
proposal and would add about $6.5 trillion to the federal deficit over 10 years.
“For a speech that’s billed as a plan to reduce the deficit, Romney’s numbers
sure do add a lot to the national debt and deficit,” says Michael Linden,
director for tax and budget policy at CAP. Linden said Romney didn’t outline
enough cuts to get to the 20 percent of GDP. And by extending the Bush-era tax
cuts while cutting corporate taxes and eliminating the estate tax, the plan
would add about $6.5 trillion to the deficit.
Romney has focused almost exclusively on jobs and the economy since launching
his second bid for the GOP presidential nomination. Less than two months ago he
unveiled his 59-point economic recovery plan that included deep cut in
corporate taxes and far-ranging reductions in government red tape. He pledged to
create 11.5 million new jobs over four years.
“The big challenge in the Romney plan as he outlined it today is that it does
not in any way address the important role that fiscal spending plays in
maintaining and creating the conditions for job creation in the U.S. and for
creating the demand businesses,” said Heather Boushey, a senior economist at
CAP. “I think that is quite frankly a shame.” Job growth remains weak.
Employers added a disappointing 80,000 new jobs in October while the unemployment rate dipped
to 9 percent, the Labor Department said on Friday.
Twenty-four percent of Republicans favor Romney for president according to
the latest Washington Post/ABC News poll, while rival
businessman Herman Cain grabbed 23 percent of support, essentially a dead
heat. Cain’s popularity rose despite being embroiled in a sexual harassment scandal in the last week.
Romney’s plan comes several weeks after GOP presidential hopeful Rep. Ron
Paul, R-Texas., unveiled his radical $1 trillion budget plan. Paul would cut defense
spending by 15 percent and wipe out the Departments of Energy, Interior,
Commerce, Education, and Housing & Urban Development.