[Vision2020] Report: Debt will swell under top GOP hopefuls’ tax plans

Art Deco art.deco.studios at gmail.com
Thu Feb 23 08:51:39 PST 2012

  Report: Debt will swell under top GOP hopefuls’ tax plans By Lori
Updated: Thursday, February 23, 2:01 AM

The national debt
likely to balloon under tax policies
by three of the four major Republican candidates for president, according
to an independent analysis of tax and spending proposals so far offered by
the candidates.

The lone exception is Texas Rep. Ron Paul, who would pair a big reduction
in tax rates with even bigger cuts in government services, slicing about $2
trillion from future borrowing.

According to the report — set for release Thursday by U.S. Budget Watch, a
project of the bipartisan Committee for a Responsible Federal Budget —
former Pennsylvania senator Rick Santorum and former House speaker Newt
Gingrich would do the most damage to the nation’s finances, offering tax
and spending policies likely to require trillions of dollars in fresh

Both men have proposed to sharply cut taxes
have not identified spending cuts sufficient to make up for the lost cash,
the report said. By 2021, the debt would rise by about $4.5 trillion under
Santorum’s policies and by about $7 trillion under those advocated by
Gingrich, pushing the portion of the debt held by outside investors to well
over 100 percent of the nation’s economy.

The red ink would gush less heavily under former Massachusetts governor
Mitt Romney, the report said — at least under earlier Romney proposals that
paired $1.35 trillion in tax cuts with $1.2 trillion in spending reductions
and would leave the debt rising on a trajectory that closely tracks current

But that probably changed Wednesday, when Romney tacked to the right and
proposed to cut federal income tax rates by an additional 20 percent for
all earners — an idea that could easily slash federal revenues by another
$3.5 trillion over the next decade, said Edward Kleinbard, a University of
Southern California law professor and former chief tax analyst for Congress.

In a late-night addendum Wednesday, analysts for U.S. Budget Watch set a
slightly lower price for the new tax provisions, suggesting that Romney’s
entire budget framework would add about $2.6 trillion to the debt by 2021.

Only Paul emerged as a fiscal conservative in the report. His policies
would cut tax revenues by more than $5 trillion over the next decade, the
report said, but the revenue loss would be offset by more than $7 trillion
in spending cuts, including deep reductions in defense and federal health

The report marks the first independent attempt to gauge the overall impact
of policies proposed by the GOP candidates on the nation’s $15.4 trillion

“As we enter the thick of the campaign season, no one can ignore the debt
issue,” said Maya MacGuineas, president of the Committee for a Responsible
Federal Budget, which works actively to support debt-reduction efforts in
Washington. “This report is designed to inform the public on the fiscal
policies put forward by each of the Republican candidates and stimulate
debate on this crucial topic.”

The report does not include an analysis of President Obama’s latest budget
request, which claims to reduce borrowing by $3 trillion over the next
decade. The group plans to do its own analysis of Obama’s request in a
future report. The group said it also plans to update the GOP proposals as
they evolve and add details.

The report does not seek to offer support to any candidate, and its authors
have gone to great lengths to give everyone the benefit of the doubt. For
example, the report offers three scenarios for each candidate: a “low-debt
scenario” based on the most generous assumptions about vague changes in
policy and a “high-debt scenario” that gives credit only for specific
policy proposals.

The numbers cited above are taken from the report’s “intermediate-debt
scenario,” which “gives credit for non-specified changes to certain part of
the budget (for example, reducing non-defense discretionary spending by a
percentage)” even if the candidate has not identified specific policy

Art Deco (Wayne A. Fox)
art.deco.studios at gmail.com
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