ROMNEY: In a setting like this, the idea that we’re going to devastate our military is simply unacceptable. I would call on the president and do call on the president to immediately introduce legislation which says we will not have a $600 billion cut to America’s military. We should not cut any funding from our base defense budget, that should not occur. And I would apply the $600 billion that were anticipated on being imposed upon the military, I would take those and apply them into other parts of the federal budget. And there are a number of candidates for that, one of course would be to take something like Medicaid, which is our health care program to the poor and return that program to the states…by doing that you more than compensate for the $600 billion that would be restored to the defense budget.
Yeah, no. For one thing, there are already some pretty massive cuts on the discretionary side of the domestic budget. Yes, it's not Medicare, Medicaid or Social Security, but if Romney only wants pain, he'll get it if this part of the trigger is also pulled.
But from a deficit-hawk standpoint, if that's what Romney is trying to pretend to be, defense cuts are far less harmful to the economy than, say, those Medicaid cuts he's screaming for.
Applying $1 billion to domestic spending priorities would create far more jobs than the same $1 billion spent on the military, according to a 2009 analysis by Robert Pollin and Heidi Garrett Peltier, economists at the University of Massachusetts.
For example, spending on educational services creates almost three times as many jobs as military spending, and health care creates almost twice as many. Tax cuts create almost 30 percent more jobs than spending money on weapons.
That's from Lawrence Korb, a senior fellow at the Center for American Progress and assistant secretary of defense in the Reagan administration. Here's another analysis on Medicaid cuts from the Economic Policy Institute reviewing the Republican budget authored by Rep. Paul Ryan. That plan called for cuts of $207 billion.
Using a standard macroeconomic model that is consistent with private- and public-sector forecasters, we find that a $207 billion cut would result in a loss of 2.1 million jobs over the next five years, or 2.9 million full-time equivalent jobs. These figures are in job-years, which refer to a job held for a single year, meaning that five jobs lost in a single year is the equivalent to one job lost over five years.<
Furthermore, the job loss would overwhelmingly be in the private economy. Medicaid has very low overhead, as about 96% of the program’s funds go toward benefits which are spent in the private sector. Assuming the 96% ratio is relatively constant across states (or at least not systematically biased in one direction), Medicaid cuts of this magnitude would result in the loss of just under 2 million private-sector jobs, or 2.8 million full-time equivalent jobs.
So Romney has proven his Republican credibility in terms of coming up with an incredibly bad economic idea to keep defense contractors safe. It might not work with the base, but it's not from a lack of effort on his part.