Romney Fiscal Plan: Hypocrisy or Idiocy?

Original Link: http://klsouth.wordpress.com/2011/11/11/romney-fiscal-plan-hypocrisy-or-idiocy/


Romney Fiscal Plan: Hypocrisy or Idiocy?

Rome is burning. The federal government has a spending addiction. Our nation has made more than $63 trillion in unfunded promises, to be paid for by future generations. Those who are awake, agree we have to cut spending in a major way. It is what drives many of us. The solution is to reduce federal spending.

And yet, Washington, D.C.’s, bipartisan, multi-decade “borrow-and-spend” agenda and the U.S. national debt crisis is still on the fence with no resolution in sight. Yes, trash the needless bureaucratic departments and agencies and “dismantle” the size and scope of intrusive government. This is a fairly straight-forward point. It is a concern as old as our Republic.

Washington spoke about it… But, Jefferson said it best:
“I place economy among the first and most important republican virtues, and public debt as the greatest of the dangers to be feared.”

Romney Fiscal Plan

On November 3,2011, Mitt Romney presented his fiscal plan in USA Today outlining a deficit-reduction plan that he said would slash federal spending and “economize, simplify and make smarter government.” Smarter Government, eh? Romney sets a target of returning federal spending to around 20% of the economy by the end of four years.

To get there, he says he’ll apply a disjointed formulation of a simple cost-benefit test across the government: “Is this program so critical, so essential, that we should borrow money from China to pay for it?” Notably, Romney claimed he would “eliminate every government program that is not “absolutely essential.”” Eliminate every government program that is not absolutely essential, eh?
Romney’s platitudes sound good until you realize Romney’s spending “cuts” would expand the federal budget by 8% over the next four years and Mr. Romney does not eliminate a single cabinet-level department. Not one. Zilch. Nada. Let me repeat. Romney does not eliminate a single cabinet-level department. That doesn’t suggest a strong commitment to fiscal responsibility.

From Jacob Sullum: Romney’s goal of cutting $500 billion from projected federal outlays in 2016 would, at best, leave the budget about 8% higher than it is now and only 11 % lower than it would be without any attempt to restrain spending. The implication: Mitt Romney thinks 89% of what the federal government does is “absolutely essential.”

Cutting the amount of an increase in spending is not a ‘cut’. It is only a reduction in the increased rate of ‘spending’. All together, Romney’s proposed cuts represent less than 3% of federal spending in 2011 and less than 8% of the $1.3 trillion deficit. Romney’s increase in the size and scope of government is hardly a commitment to fiscal responsibility. By contrast, Ron Paul’s plan would balance the budget by 2015.

Specific Romney cut highlights:

• Romney’s spending “cuts” would expand the federal budget, at best, 8% by 2016.

• Romney claimed he would “eliminate every government program that is not “absolutely essential.”

• Mitt Romney does not eliminate a single cabinet-level department.

• Mitt Romney thinks the Department of Housing and Urban Development is “absolutely essential.”

• Mitt Romney thinks the Department of Education is “absolutely essential.”

• Mitt Romney thinks the Department Energy is “absolutely essential.”

• Mitt Romney thinks the Department of Commerce is “absolutely essential.”

• Mitt Romney thinks the EPA is “absolutely essential.”

• Mitt Romney thinks the National Endowment for the Arts is “absolutely essential.”

• Mitt Romney thinks the National Endowment for the Humanities is “absolutely essential.”

• Mitt Romney thinks funding NPR and PBS are “absolutely essential.”

• Mitt Romney does not cut one government worker. He would reduce the federal work force only through attrition.

• Romney said he would align federal compensation with the private sector, which he said would save more than $40 billion by 2016.

• Romney didn’t endorse private Social Security accounts so younger workers can build up wealth that they would own and be able to pass along to heirs. Instead, Romney would endorse “progressive indexing,” essentially an income test that would slow the increase in future benefits for wealthier seniors and gradually raise the retirement age.

• Romney wants to “eliminate Title X family planning programs which cost roughly $300 million a year.

• Romney wants to “eliminate subsidies for the unprofitable Amtrak” which he says would save $1.6 billion a year.

• Romney says he would repeal ObamaCare, thereby saving $95 billion in 2016. Though, according to the CBO, the $95 billion reflects how much federal spending would be cut, not how much the repeal would reduce the deficit. Health-care repeal would cut the deficit by $16 billion in 2016, not $95 billion. That is because the health care law raises some taxes and cuts Medicare spending, changes that would also be repealed.

• Romney favors block grants for Medicaid to the states capped at inflation plus 1%, which means Governors would lead a wave of federalist experimentation. The proposed cuts would reach $200 billion a year by the end of the decade.

• Romney embraces about two-thirds of Paul Ryan’s “premium support” Medicare plan giving all seniors a defined cash contribution to choose among private insurance options. Missing from his plan is how the premium-support payments would grow over time.

• Romney would repeal the Davis-Bacon Act saving $10 billion a year.

• Romney would increase Defense spending.

Summary

Underwhelming. The idea of eliminating programs is always preferable to proposals than make overall spending reductions. The latter path can simply be negated by future Congresses by increasing the spending again, whereas elimination of the program makes it much more difficult to recreate them. Romney simply has no credibility when he promises to “eliminate every government program that is not absolutely essential.”

Instead of zeroing NEA out, Romney makes “deep reductions” in NEA’s funding, which was $155 million this year, or 0.004% of the $3.7 trillion federal budget. And to think, getting rid of three Arts programs; the NEA, the NEH and the CPB [CPB provides funding for both NPR and PBS] would save less than $1 billion a year, about 0.02% of the total budget. What does it say about Romney’s commitment to fiscal restraint that he can’t even go that far?

Romney said he would “consolidate, eliminate and streamline federal departments, agencies and offices following a stem-to-stern review.” But gave no detail. Romney claims he would take a stand against ‘foreign aid’ or giving taxpayer money to “countries that oppose America’s interests” but then does not name any in his plan, which in any event, accounts for just 1% of federal spending. Could he possibly be more vague?

The biggest change is more of a nod to voucherizing Medicare, though keeping the old system for those who want it. Typical Romney. Have it both ways. Where are the $100B required annual savings in Social Security, Medicare and Defense? Name some victims other than Amtrak passengers and ballet companies. Next he’ll claim he can balance the budget by eliminating the White House Christmas card.

There is pervasive institutional dishonesty when it comes to D.C.’s budget math. A classic example is the way politicians rig the system so a “spending cut” takes place if the budget grows by, say, 6% instead of 8%. The nefarious D.C. budget math is explained here by Dan Mitchell during an interview with Judge Napolitano.

Romney is full of platitude and pander [stronger language deleted by author]. He has no intention or plans to cut much of anything, but is making symbolic attacks on things Republicans traditionally don’t like. It’s the most predictable, cliché list of pseudo-cuts I’ve ever seen, proving once again that Romney is a principle-free opportunist. With Romney, we would only be rearranging the deck chairs on the Titanic:

Mr. Romney does not eliminate a single cabinet-level department.
Mr. Romney’s spending “cuts” would expand the federal budget.
Mr. Romney thinks 89% of what the federal government does is “absolutely essential.”

It is laughable how Mitt Romney tries to pass himself off as some champion for fiscal restraint, a candidate with grassroots Tea Party ideals with a history of job creation. Nothing could be further from the truth. Romney’s record as Massachusetts’s governor is that of a liberal progressive; higher taxes, high unemployment and bigger government. And, this chart from the Boston Globe on Massachusetts’s economic performance during Romney’s tenure brings home the point.
Instead of reducing federal spending Rome would continue to burn under Romney.