[Vision2020] How the GOP would expand the deficit

[Art Deco]

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   How the GOP would expand the deficit By Editorial Board, Published:
February 26

AT A TIME of record debts and deficits, the two leading Republican
presidential candidates are proposing a path on taxes and spending likely
to add trillions more. That’s the sobering conclusion of the nonpartisan
Committee for a Responsible Federal Budget (CRFB), whose board includes six
Republican former lawmakers with expertise in budget issues, three
Republican former heads of the Congressional Budget Office, and two former
Office of Management and Budget directors under Republican presidents.

Last month, we examined former Massachusetts governor Mitt Romney’s reckless
tax plan<http://www.washingtonpost.com/opinions/trillions-in-tax-cuts/2012/01/26/gIQAGrwxaQ_story.html>,
which, according to calculations by the Urban Institute-Brookings
Institution Tax Policy Center, would drain another $180 billion from the
treasury in 2015 alone. The CRFB estimated the 10-year cost of the original
Romney tax plan at $1.3 trillion. By the end of the 10-year window, the
debt would be a dangerous 86 percent of the gross domestic product.

But last week Mr. Romney upped the tax-cutting ante, promising, in addition
to the previous grab bag of tax goodies, a 20 percent across-the-board cut
in marginal rates and repeal of the alternative minimum tax. The Tax Policy
Center estimated that the 20 percent rate cut
<http://www.washingtonpost.com/business/economy/mitt-romneys-tax-proposal-may-not-be-narrative-campaign-wants/2012/02/22/gIQAfNkIUR_story.html>would
cost about $150 billion in 2015 alone. The Romney campaign said that the
rate change wouldn’t add to the deficit because it would generate
unspecified economic growth and be accompanied by spending cuts and
elimination or cutbacks of deductions. Okay, which ones? On that question,
the campaign was decidedly unspecific — understandably so, because its math
doesn’t add up. Until he is more specific about what sacred cows he would
tackle — employer-sponsored health care? — Mr. Romney’s plan cannot be
taken as a fiscally responsible proposal.

Then again, he looks reasonable by comparison with former Pennsylvania
senator Rick Santorum, who envisions a tax cut costing an eye-popping $6
trillion over 10 years — above and beyond the $4 trillion cost of extending
the George W. Bush tax cuts. Mr. Santorum would flatten the tax code,
collapsing today’s six brackets into two: 10 percent and 28 percent. Those
in the 10 percent bracket would pay no taxes on capital gains and
dividends; those in the 28 percent bracket would pay a 12 percent rate. He
would triple the exemption for dependent children and cut the corporate tax
rate in half — except for manufacturers, who would pay nothing.

How to do this without blowing a huge hole in the budget? Mr. Santorum
outlines some $2.2 trillion in specific policies, such as shifting Medicare
to a premium support system, transforming social programs into block grants
to states and capping their growth, and cutting other domestic spending.
Then he offers up the biggest magic asterisk of all time, cutting another
$5 trillion within five years, details not provided. Wisely discounting
that gauzy promise, the CRFB projects that under its intermediate scenario
Mr. Santorum’s policies would increase deficits by $4.5 trillion through
2021, bringing the debt to a scary 107 percent of the economy.

The campaign debate needs to move from pie-in-the-sky promises. Promising
additional tax cuts may win votes, but these proposals are unaffordable and
dangerous.
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-- 
Art Deco (Wayne A. Fox)
art.deco.studios at gmail.com
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