Moderate Mitt? Have You Looked at His Budget?

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JONATHAN COHN JANUARY 15, 2012

Moderate Mitt? Have You Looked at His Budget?

Has Mitt Romney committed himself to severe cuts in government spending, undermining programs on which not just poor but also middle class Americans depend? That question has been the subject of debate lately, with smart people like Ross Douthat asserting that Romney's position is less extreme, and less conservative, than liberal critics like me have assumed.

I respectfully disagree. And the single best piece of proof may be a proposal that’s gotten virtually no attention: Romney's proposal to cap federal spending, which would result in harsher cuts to domestic spending than even Paul Ryan has embraced.

How can that be? Start with some budget math. Romney he has vowed that, by 2016, he would cap federal spending at 20 percent of gross domestic product while maintaining defense spending at 4 percent of GDP.  That means he would limit all non-defense spending to 16 percent of GDP.

The latest Congressional Budget Office projection suggests that GDP in 2016 will be $19.1 trillion. Sixteen percent of that is about $3.1 trillion. But, based on CBO figures, non-defense spending will be about $3.6 trillion in 2016. So to meet his goals, Romney would have to cut non-defense federal spending in 2016 by roughly $500 billion.

Romney doesn’t deny this. On the contrary, he’s been refreshingly honest on this subject. In the Washington D.C., speech where he laid out his budget vision, he said “we’ll need to find almost $500 billion in savings a year in 2016.” But Romney has not given many details on what that would entail. (Nor did his campaign respond to questions about this from TNR.) Perhaps that's because the impact of these cuts would scare the bejeezus out of some people.

Taking half a trillion dollars out of $3.6 trillion works out to a 14 percent reduction. (To be precise, it would be 14.1 percent.) Applied equally to all non-defense spending, that would mean approximately $130 billion less for Social Security and about $90 billion less for Medicare, just in 2016 alone. To give you a sense of context, the Medicare cuts in the Affordable Care Act amount to around $50 billion a year in 2016. And those cuts, unlike Romney's, are largely offset by expanded spending on Medicaid and subsidies for private health insurance, thereby cushioning the blow on the health care system.

Of course, Romney could decide to exempt Medicare and Social Security. But then the cuts for other programs would have to be much higher: 25 percent, on average. And when I say “other programs,” I mean every other non-defense thing the government does: Education, transportation, environmental protection, safety net programs, law enforcement…you get the idea. Can we afford to spend a quarter less on highways? How about the Centers for Disease Control and the FBI? Or Head Start, food stamps, and Pell Grants? 

If that doesn’t get your attention, maybe this will: These cuts would be in addition to the automatic cuts already set to take effect in January, 2013, now that the deficit super-committee has failed to reach a consensus. The Center on Budget and Policy Priorities recently wrote that, in 2021, non-defense discretionary programs will be cut by 17 percent from last year’s baseline levels by the caps and sequestrations enacted in 2011. So Romney’s figures imply cuts of 14 percent or 25 percent (if Romney exempts Social Security and Medicare from these cuts) to non-defense discretionary programs on top of the substantial cut that is already set to take place.

What’s more, the above calculations – which I ran by several budget experts, just to make sure I had them right – are probably on the generous side. They don’t account for the impact of interest, which (for reasons I can explain in a separate post) are likely to require larger cuts. In addition, this is just a snapshot of 2016. The cuts to the big entitlement programs, particularly Medicare and Medicaid, would become larger in future years.

Still not convinced? Then keep in mind that Romney also supports a balanced budget amendment, which would likely require even steeper cuts than these calculations suggest, particularly if Romney were to cut taxes as promised (and thus reduce federal revenue).

So why don’t people recognize this proposal for the radical idea it is? One reason is that the Romney plan may be less severe than the ones other Republican presidential candidates have put forward. Santorum and Perry, for example, want to cap spending at 18 percent of GDP, while enacting larger tax cuts that and balanced budget requirements that would likely require even more drastic spending cuts. 

But while Romney's spending cap may put him to the left of his presidential rivals, it puts him to the right of the Ryan and the House Budget Committee. Their budget would reduce non-defense spending in 2016 by $335 billion, or about 9.4 percent. That's a lot less than $500 billion and 14.1 percent. (We've seen this same phenomenon with other parts of the agenda, too: Although Romney's tax plan is less conservative than his rivals', he still gives big breaks to the wealthy, as Ezra Klein noted the other day.)

Embracing an agenda on the campaign trail and implementing it as president are wholly different things. Plenty of conservatives doubt Romney would live up to these commitments and, surely, a vow to cap federal spending at a fixed percentage of GDP is easier to break than a vow never to raise taxes. But, as the political scientist Jonathan Bernstein recently observed in the Washington Monthly, presidents have a funny way of following up on their promises and Romney, if elected, will probably have a Republican Congress pushing him to the right.

Maybe he'd really pursue these policies and maybe he wouldn't. Who knows. But should we really take that chance? 

Update: In the first sentence, I changed "crippling" to "undermining," lest somebody accuse me of overstatement.

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posted in: jonathan cohn, politics, his, romney, medicare, paul ryan, ross douthat

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