"I believe for every drop of rain that falls,
A flower grows."
-Tom Jones
"I believe that for every tax that is cut,
The deficit falls."
-Mitt Romney
Mitt Romney's victories in Michigan and Arizona establish him as the presumptive Republican presidential nominee. Now his actual views deserve more serious attention than they have been accorded in the Republican primaries, where he has benefited by appearing less nutty than the competition.
Romney claims that he has a plan for "more jobs, less debt and smaller government."
He also says that he has the "integrity" to "speak honestly with the American people."
But his "plan" simply doesn't add up. He wants to lower taxes, raise spending on the military, protect Social Security and Medicare for a decade, and cut $6 trillion out of spending to balance the budget. He gets there only by projecting fantastical rates of growth and using magic asterisks to indicate cuts or loophole closings that he isn't prepared to reveal.
But violating arithmetic is a minor offense compared to Romney's savaging of common sense and trampling of basic values. Romney argues that he has a hard time appealing to the Republican "base" voters because he isn't prepared to "set my hair on fire" and say "outrageous things." But the plan he presents -- sculpted to appeal to those very voters -- is just as self-mutilating. Here in brief are the Romney assumptions.
Romney believes that the rich have too little money.
So despite trillion-dollar deficits and the most extreme inequality since the Gilded Age, he would lower taxes on the wealthy. He not only would extend the Bush tax cuts, but he'd also add another 20% cut in tax rates across the board. He sustains the 15 percent tax rate on income from wealth (capital gains and dividends) that allowed him to pay an effective rate of 13.9% on his millions in income. He'd eliminate the Alternative Minimum Tax, creating a field day for tax avoidance. He would erase the estate tax completely, a tax that only currently applies to the richest one-fourth of 1 percent of estates. Conservative Josh Barro estimates that his tax cuts total about $5 trillion over 10 years compared to current tax policy.
The Tax Policy Center estimated that under the original Romney tax plan, the wealthiest 1 percent would pocket about 90 percent of all of Romney's tax breaks, with an average tax break of over $82,000 a year (and a whopping $460,000 for the top one-tenth of one percent). The new 20 percent cut in tax rates is similarly skewed to the top.
Romney believes that the Pentagon has too little money.
Romney somehow believes that our military is too weak, despite the fact that the Soviet Union is no more, Bin Laden is dead and al Qaeda dispersed, and the military is left chasing pirates, waiting for China to grow up and provide an adult adversary. So Romney would fix military spending at 4 percent of GDP -- arbitrarily; strategy to fit the funds rather than vice versa. As former Defense Secretary Robert Gates said, this is "math, not strategy," a math that adds about $200 billion a year to the budget by 2016.
Romney believes that corporations pay too much in taxes and have too few tax havens.
So he would lower the corporate tax rate to 25 percent and move to a "territorial" tax system, ending any taxation of profits earned abroad. Romney says this would give companies an incentive to invest their foreign profits in the U.S. It would also give them multi-million dollar incentives to cook their books -- use what CFOs call "transfer pricing" -- to book their profits abroad to escape taxes altogether. Romney and his old firm, Bain Capital, of course, are notorious for their use of offshore tax havens. Maybe he just wants to let other companies in on the bounty.
Romney believes that today's working people should work longer before retirement and receive less security when they do.
For Romney, shared sacrifice is for suckers. The wealthy and corporations get tax breaks; working people get to work longer. Boomers over 55 -- who are known to vote -- are protected. But for workers under 55, Romney would raise the retirement age for Social Security, means-test its benefits, and begin to turn Medicare into a voucher program. (He'd offer a Medicare premium of progressively lower benefit as an alternative to the current system, arguing that the blessings of competition would allow it to provide more for less. In fact, our only experience with a similar system -- Medicare Advantage -- cost much more than normal Medicare).
Raising the age of retirement is a harsh cut in benefits, particularly for workers who do demanding physical labor and are likely to have shorter lifespans. It's particularly noxious since Social Security doesn't add to the deficit and its long-term shortfalls could be met largely by raising the lid on payroll taxes or by having workers gain a fair share of rising productivity and profits.
The rising costs of Medicare, which are unaffordable, are simply the budgetary expression of a broken health care system. We have to get our health care costs under control or they will bankrupt families, companies, and governments. Romney's plan does nothing to address that problem.
Romney believes that too many Americans have health insurance.
To the extent he deals with health care costs, Romney does so by eliminating coverage. He would repeal health care reform, ending the health insurance that would have been provided for more than 34 million Americans.
And Romney says he would defray much of the cost of his tax cuts by closing loopholes and "exclusions." He won't touch the biggest loophole -- the low tax rate on capital gains and dividends. The only others big enough to matter are the tax break offered employers for providing health care for their employees, and the mortgage tax deduction. Ending the health care benefit would lead companies to eliminate or cut health care benefits for millions of workers.
Romney believes that we can continue to rely on the public investments of our parents' generation.
Our aged infrastructure -- sewer systems, roads and bridges, trains and subways, electric grid and more -- is decrepit, and increasingly not only a disadvantage competitively, but a danger to our health. Yet Romney's budget would force deep cuts -- estimated at over one-third before he added the 20 percent income tax cuts across the board. He would forego the opportunity to rebuild America at a time when the construction industry is idle and interest rates are near record lows. Instead, he would be forced to slash the investments we now make, that are inadequate even to meet basic safety standards.
Romney believes that poor children are on their own.
Or rather he believes that children must play the hand that fate deals them. Those born to rich families can inherit unlimited fortunes. Those born in poverty must overcome it. Romney says he's "not concerned about the very poor," because they have a safety net. But his plans will shred it.
Government is essentially, as Paul Krugman has written, an insurance program (Social Security, Medicare, Medicaid) with an army. The programs that support the rest of government -- including the FBI and the IRS, environmental regulation, education, guarding the coasts and what little safety net we have (food stamps, housing vouchers, aid to poor mothers, Head Start, infant nutrition, home heating assistance) -- constitute barely 15 percent of federal spending.
Romney promises to balance the budget while cutting taxes, increasing spending on the military and sustaining Social Security and Medicare for those 55 and over. That requires brutal cuts in everything else. The Center for Budget and Policy Priorities estimated that Romney's plan even before the added income tax cuts -- if spread across the remaining budget -- required cuts of 38 to 50%, depending on how fast he wanted to balance the budget. With much of the budget in personnel, that translates into cutting half of all meat inspectors, workplace safety monitors, FBI agents, etc. Compensation for disabled veterans (which average less than $13,000 a year) would be cut by more than one-fourth.
But poor children will pay the biggest price -- in less nutrition and health care as infants, in less stable housing, in more crowded schools and more hunger. CBPP estimates that cuts in the food stamp program (now known as SNAP -- Supplemental Nutrition Assistance Program) would have to throw 12 million low-income people off the benefit rolls or cut benefits deeply.
Yet even then, the Romney plan still doesn't add up. But the violation of common sense and basic moral values is greater than the offense to math. Romney's plan would leave us more unequal, with more poverty, less opportunity, burdened by dangerous and inadequate public infrastructure and services. At a time of extreme inequality, he lavishes benefits on the few, while exacting the biggest sacrifices from the most vulnerable.
Romney says he has the "integrity" to "speak honestly to the American people." But he is peddling an agenda that can only be sold by obfuscation, misdirection and straight-up lies.
Romney's opponents in the primaries did not challenge this cruel nonsense, for their plans are worse. But now that Romney is on a clear path to the nomination, it is time for the press corps to press Romney on how he proposes to defend the indefensible.