the safety net and much else and still keep running
us into deeper debt. (Caricature by DonkeyHotey)
Great. Massive wreckage to the well-being of the nation and still swimming in the red ink they all say they will eliminate. Austerity on the half-shell.
The analysis comes from the Committee for a Responsible Federal Budget, which has been housed at the non-partisan, non-profit New America Foundation the past nine years. It comprises a bipartisan array of former members of Congress, former members of the federal executive branch and prominent businesspeople.
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CRFB generated optimistic, pessimistic and middle-ground scenarios of what might happen to the national debt over the study period if each the four candidates' campaign promises were adopted. Where the details of a candidate's proposals were unclear, the committee extrapolated or left them out of its calculations.
Results? Despite all their talk about bringing the federal revenue into surplus, only libertarian Ron Paul actually would accomplish that in two of the three scenarios. Newt Gingrich, who continues to claim credit for Bill Clinton's balancing of the budget in the final two years of his presidency, would boost the debt in all three scenarios, by $9.7 trillion in the worst case. Both Mitt Romney and Rick Santorum would significantly raise the national debt above the current level in two of three scenarios.
The big problem: All four propose tax cuts that are deeper than the spending cuts they espouse. One at a time:
Newt Gingrich: He has proposed a flat income tax of 15 percent, cutting the corporate tax rate from 35 percent to 12.5 percent, eliminating the estate (inheritance) tax and the capital gains tax, and chopping dozens of programs like food stamps, Head Start, adoptive services, Supplemental Security Income and child-care assistance in half. He would deeply slash education spending with cuts in primary, secondary and post-secondary funding, including Pell Grants.
Under the worst case scenario, his proposals would lead to a $9.7 trillion in additional debt. Intermediate: $7 trillion. Best case: $2.8 trillion.
Mitt Romney: He has proposed a cut in the corporate tax rate form 35 percent to 25 percent and a 20 percent across the board cut in the income tax, bringing the top bracket down from 35 percent to 28 percent. He would eliminate the estate tax. He wants to revamp Social Security and Medicare. He proposes to turn Medicaid completely over to the states with a cap on spending. He would hire only one person for each two that leave the federal workforce. He would cut discretionary spending by 5 percent across the board and make other cuts, like eliminating money for Title X family planning and Amtrak. He would set a floor of 4 percent of Gross Domestic Product for defense spending.
Worst case: Additional debt of $2.2 trillion. Intermediate: an extra $250 billion. Best case: a reduction of $2.2 trillion.
The CRFB amended its take on Romney after his Wednesday proposals of a 20 percent across the board income-tax cut. If there were no spending cuts to offset the lost revenue (and he has not proposed any specifics yet), it would add $2.6 trillion in extra debt to each of those scenarios.
Rick Santorum: He proposes to reduce the capital gains tax from 15 percent to 12 percent, set two income tax rates of 10 and 28 percent and triple the exemption for dependent children. He would dump all tax deductions except those for charitable giving, mortgage interest, health care, retirement savings and children. He would eliminate the estate tax. He would cut the corporate tax rate from 35 percent to 17.5 percent.
He would switch Medicare to a fixed subsidy for the purchase of private health insurance, reform Medicare and Social Security benefits by raising the retirement age and means testing. In addition, he would: transform various programs like Medicaid, housing, education, job training and food stamps into block grants to the states with a spending cap; freeze defense spending for five years; cut the federal workforce by 10 percent and freeze non-defense pay for four years; eliminate Title X family planning spending; and cut spending for the United Nations and international aid by half. Sell some federal property.
Worst case: additional debt of $5.3 trillion. Intermediate: an extra $4.5 trillion Best case: a reduction of $2.6 trillion
Ron Paul: He, of course, wants to repeal the 16th Amendment and get rid of the income tax altogether. While waiting for that to happen, he would eliminate estate and gift taxes, reduce the corporate tax rate to 15 percent, end taxes on profits earned abroad, transfer Medicaid, the Children’s Health Insurance Program and food stamps into block grants for the states with spending frozen at the 2006 level.
He would immediately end U.S. military operations in Iraq and Afghanistan and cut overall defense spending by 9 percent from what is projected over the next 10 years. He would cut the federal work force by 10 percent, cut travel budgets, reduce spending by banning contracts for projects built with union labor and repeal the Davis-Bacon Act, which requires that federal contractors pay their workers the locally prevailing union wages for similar work. He would eliminate the Departments of Commerce, Education, Energy, Housing and Urban Development and Interior. He would make big cuts elsewhere, including the elimination of most State Department programs and U.N. funding. He would reduce funding for the Centers for Disease Control and the National Institutes of Health. He would move toward fixed payment to Medicare recipients so they could buy their own health insurance.
Worst case: An increase in debt of $1.9 trillion. Middle-ground: a reduction of $2.2 trillion. Best case: a reduction of $4.3 trillion
One thing would be certain in all this: The 1 percent would be a lot better off. And soup kitchens and free clinics would have even longer queues than they do now.