Romney's Bad Math
Ben Adler on April 16, 2012 - 5:11 PM ET
Speaking at a closed-press fundraiser in Palm Beach, Florida, on
Sunday night, Mitt Romney offered more details than he ever has to
date on what he might do about federal spending and taxes. Luckily,
some reporters standing outside overheard him. NBC reports:
"I'm going to take a lot of departments in Washington, and agencies,
and combine them. Some eliminate, but I'm probably not going to lay
out just exactly which ones are going to go," Romney said. "Things
like Housing and Urban Development, which my dad was head of, that
might not be around later. But I'm not going to actually go through
these one by one. What I can tell you is, we've got far too many
bureaucrats. I will send a lot of what happens in Washington back to
the states."
Asked about the fate of the Department of Education in a potential
Romney administration, the former governor suggested it would also
face a dramatic restructuring.
"The Department of Education: I will either consolidate with another
agency, or perhaps make it a heck of a lot smaller. I'm not going to
get rid of it entirely," Romney said, explaining that part of his
reasoning behind preserving the agency was to maintain a federal role
in pushing back against teachers' unions. Romney added that he learned
in his 1994 campaign for Senate that proposing to eliminate the agency
was politically volatile.
Romney expounded on that lesson—that he shouldn't publicly admit to
his plans to leave society's most vulnerable citizens without any
federal support—in a March interview with The Weekly Standard. "One of
the things I found in a short campaign against Ted Kennedy was that
when I said, for instance, that I wanted to eliminate the Department
of Education, that was used to suggest I don't care about education,"
said Romney. "So will there be some that get eliminated or combined?
The answer is yes, but I'm not going to give you a list right now." In
other words, Romney believes that if he tells the public what he might
actually do in office they will dislike his plans and reject them.
This is just as revealing as Romney's infamous recollection that he
told his gardener not to use illegal immigrants on his property
because "I'm running for office, for Pete's sake." Romney doesn't want
to wage an honest contest between his ideas and his opponent's. His
self-described preference is to try to win by telling the American
they can have tax cuts without painful sacrifices on spending.
Publicly, Romney has proposed to make the Bush tax cuts permanent and
to then cut taxes further. He also wants to increase defense spending.
In total he would reduce federal tax revenues by $5 billion over the
next ten years. The Committee for a Responsible Budget estimated that
Romney would add $2.6 trillion to the deficit. He has promised to cut
spending as well, but he has avoided mentioning credible specifics.
That's bad enough. But what is even worse is that what he offers in
private doesn't add up either. It would be one thing if Romney had a
secret plan to balance the budget with drastic spending cuts to major
federal programs. While it would be dishonorable of him to refuse to
discuss that plan while running for president, at least you would know
he has a plausible—if totally heartless—plan for governing once
elected.
But he doesn't. Instead the new details he offered were that he might
eliminate the mortgage interest deduction on second homes and abolish
the Department of Housing and Urban Development (HUD).
The former idea is a good one, although I'll believe that President
Romney and Congress have the will to stand up to powerful lobbies such
as the real estate and construction industries when I see it happen.
It would not, however, generate nearly enough revenue to make up for
Romney's massive tax cuts. Perhaps because Romney himself owns three
homes, he thinks owning a second home is a fairly common middle-class
practice. In fact, only 6 percent of Americans have a second home.
Eliminating the entire mortgage tax deduction would save about $215
billion by 2021, according to the Congressional Budget Office, so
eliminating it only on second homes would save just a fraction of
that. If you want to be generous and assume that a lot of the owners
of second homes also have third and fourth homes, and that they take
out mortgages to buy those homes, you could guess that Romney's
proposal might save something like 10 percent of that total, or a
whopping $21.5 billion in total between now and 2021. By contrast,
letting the Bush tax cuts expire only on families making more than
$250,000 per year would have saved $40 billion in 2011 alone.
While HUD makes for an appealing target for destruction among rich
Republicans because it is the only cabinet department dedicated to
addressing poverty, it is not actually a very large agency compared
to, say, the Pentagon. Its entire budget for fiscal year 2012 is $47.2
billion dollars. (The Department of Defense budget this year is $645.7
billion.) The vast majority of HUD spending falls into one of two
appropriation streams: construction of public housing ($19.2 billion)
and Section 8 housing vouchers ($17.2 billion). Romney did not specify
whether he would eliminate those programs, or just abolish the
department that houses them and redistribute their responsibilities.
Assuming Romney doesn't, or can't, actually get rid of the federal
government's two main programs to prevent homelessness, he won't get
very much savings by closing HUD and its important, but smaller,
programs such as Community Development Block Grants. As I report in a
forthcoming feature for Next American City, under President Obama HUD
has been dramatically helpful to cities with very small amounts of
money through programs such as the Sustainable Communities Initiative.
I've asked the Romney campaign to clarify whether Romney wants to
eliminate all federal housing subsidies and, if so, whether he has any
plan to combat the dramatic rise in homelessness and severe poverty
that would surely result. Having not received a response, my guess is
that his honest answer would be that he has no idea what exactly he
proposes to cut. And he certainly hasn't bothered to come up with an
alternative affordable housing agenda.
Republicans are not terribly interested in making serious domestic
policy proposals or even dealing with social issues at all. For
example, House Republicans have decided that their zeal to keep taxes
low on millionaires and even billionaires must be paid for by
squeezing food stamp recipients. As Politico's David Rogers reports,
"An average family of four faces an 11 percent cut in monthly benefits
after Sept. 1, and even more important is the tighter enforcement of
rules demanding that households exhaust most of their savings before
qualifying for help." If they succeed, it will save $3 billion per
year.
Republicans, including Romney, are fond of saying that they idolize
Ronald Reagan and wish to govern as he did. And they would, with lower
taxes, higher deficits, greater inequality and less help for the most
needy.
More:
http://www.thenation.com/blog/167416/romneys-bad-math
--
Together, we can change the world, one mind at a time.
Have a great day,
Tommy
--
Together, we can change the world, one mind at a time.
Have a great day,
Tommy
--
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