Mitt Romney Loves Cutting


The challenge of raising taxes is that it depresses growth. And so like a dog chasing its tail, you can’t get to a balanced budget by simply raising taxes. As a matter of fact, it is ultimately counterproductive. So my plan is based upon reducing spending and putting in place a program of policies that put more people to work and raise wages. So specifically, places that I would reduce spending: First, I will eliminate programs that are not absolutely essential. Obamacare is one of the easiest to eliminate from my standpoint and that saves approximately $100 billion a year. There are also programs I would return to the states where their growth can be managed and where they will be carried out with less fraud, inefficiency, and abuse. So for example, Medicaid, housing vouchers, food stamps, and other programs of that nature, I believe, can best be administered by the states. And finally I will cut the number of federal employees through attrition by at least 10 percent, and I will link their compensation with that which exists in the private sector. The plan that my team and I put in place achieves a balanced budget within eight years and does so without raising taxes.

Mitt Romney signed Grover Norquist’s pledge to veto any tax increase if he were to become president, and in an interview with Bloomberg Businessweek, says his plan to balance the budget is to basically get rid of a bunch of stuff, and ask individual states to take on additional programs, because, you know, states are just so much more efficient at balancing their budgets and running programs. And, yeah, the economy is going to do a swell job at absorbing all those federal employees he’s planning on laying off. But, hey, the cover of the magazine looks great this week!

---
---
---
---
---
---

6 Comments / Post A Comment

3jane (#645)

But hey, he said he’s going to pay all the remaining public employees what they would get in the private sector. So that means they’re all pretty much getting raises, right?

OK so let’s see. We can throw out the $100 billion a year claim, because nobody can explain where those numbers come from and the CBO estimates the ACA will cut deficits by $124 billion over 10 years. So axing Obamacare actually costs ~$12.4 billion a year.

The total cost of compensation and benefits for all federal employees is about $200 billion a year. So cutting raw headcount by 10% across the board saves $20 billion a year.

If you adjusted federal compensation to align with the private sector, they’d pay about 2% less (the feds pay more per worker than the private sector overall, but the also employ a lot more people with advanced degrees, who earn 16% less on average than comparable private workers). So that’s $3.6 billion a year.

Let’s be super generous with the state devolution and say that it will reduce growth in these programs by HALF (highly unlikely, but just to be nice). That would save near to $100 billion (total guesstimate), or $10 billion a year.

So totaling up the numbers, Romney’s ambitious reconfiguration of the entire Federal government would save, at best, a little over $21 billion a year.

The deficit in FY 2012 is expected to total about $1,327 billion. If we want to make that up through the kinds of proposals Romney suggests, and with no new taxes, firing every last government employee and eliminating Medicaid and Medicare would just about get us there.

honey cowl (#1,510)

Oh my god I can’t read anything more about Mitt Romney without freaking out. What if he actually wins?! WHAT WILL WE DO?!

Poppy (#1,438)

@Lauren we will leave.

…Just me?

jfruh (#161)

There are also programs I would return to the states where their growth can be managed and where they will be carried out with less fraud, inefficiency, and abuse. So for example, Medicaid, housing vouchers, food stamps, and other programs of that nature, I believe, can best be administered by the states.

So, uh, get ready for a bunch of state-level tax hikes, I guess?

RosemaryF (#345)

Whoever is running BusinessWeek’s design department has been on a LOT of mind altering drugs for about a year. The layout has gotten so bad that my library is cancelling our subscription because it is so unreadable.

Comments are closed!