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Monday, July 16, 2018

Romney,the radical

The Republican presidential candidate’s proposed cuts are far more draconian than his running mate Paul Ryan’s

Written by New York Times | Published: October 16, 2012 3:05:44 am

The Republican presidential candidate’s proposed cuts are far more draconian than his running mate Paul Ryan’s

MITT ROMNEY,moderate. That earnestly sought post-debate public image contrasts starkly with Romney’s actual positions on many issues,especially the future trajectory of government spending. Clinging tightly to a studied vagueness when pressed for unpopular specifics,Romney has put forward a budget framework that would not eviscerate Medicare and Social Security,as is commonly believed,but would slash everything else that’s not defence.

President Obama should use Tuesday night’s debate to press Romney to defend — or even just explain — these proposed cuts,which would be far more draconian than those advanced by his running mate,Paul D. Ryan. Ryan is widely viewed as the real fiscal hawk,but in key areas,his views on spending levels are actually closer to Obama’s than to Romney’s.

All in all,Ryan and Romney do see the future similarly — over the next decade,they want government spending reduced to about 20 per cent of the United States’ gross domestic product,below the historic average of around 21 per cent. (Recognising that an ageing society costs more,Obama proposes to hold spending at its current level,23 per cent.)

These differences may not sound like much,but by 2023,each percentage point of GDP could represent about $250 billion in federal spending.

Though Vice President Joseph R. Biden Jr brought it up repeatedly in his debate with Ryan on Thursday,Social Security — the single biggest government expenditure — is not on the battlefield. Romney and Ryan have each backed away from threats to privatise or cut it and now propose to spend the same amount on it as Obama would in the coming decade. That’s not the case with Medicare. Obama and Ryan have each endorsed similar packages of about $950 billion of savings over 10 years,while Romney has opposed any reduction,making it virtually impossible for him to achieve his overall spending limit.

To be sure,Romney and Ryan agree — and differ with Obama — on many matters,like how to contain the growth in Medicare spending and whether to raise the eligibility age. But with respect to nearly half the budget,Romney and Ryan widely diverge from each other.

Romney is calling for a huge increase in defence spending — roughly $2 trillion more over the next decade than Ryan wants to spend,which is only $400 billion above Obama’s budget — even though the military is not asking for such an increase. Such an increase would force giant reductions,about 40 per cent,in everything that’s left. “Everything else” isn’t some catch-all of small items,like feeding Big Bird. We’re talking about a vast array of programmes including civilian and military pensions,food stamps,unemployment and disability compensation,the earned income and child tax credits,family support and nutrition,K-12 education,transportation,public safety and disaster relief. And on and on.

All told,Romney would allocate $6.9 trillion for these items,compared with the $9.3 trillion proposed by his own running mate (and Obama’s $12 trillion,which itself represents a 9 per cent reduction from current levels,after adjusting for inflation).

No doubt some of what is buried within “other mandatory and non-defence discretionary spending” can be eliminated. Perhaps Americans won’t miss a few national parks or the space programme. But also nestled within this category are critical outlays for investments in infrastructure and research. The share of spending on infrastructure (roads,airports,dams and the like) fell from 2 per cent of GDP in 1971 to 1 per cent in 2010.

More — not less — government money needs to be invested in these kinds of growth-generating projects (not to mention education and training).

I recognise that in the real world,cuts on the scale envisioned by Romney will prove politically untenable,which would force a President Romney to rethink his agenda. But as a statement of intent,it’s Romney — not Ryan — who has produced the budget that would more dramatically reduce the services offered by government,and in ways that would shock and outrage most Americans. We can only hope that Obama will draw those contrasts clearly in the debate.

Rattner,a contributing opinion writer,was a counsellor to the Treasury secretary in the Obama administration

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