Study: 3 of 4 GOP candidates would pile up debt
Find a Conversation
|Fri, 02-24-2012 - 1:34pm|
Mitt Romney, Newt Gingrich and Rick Santorum are promoting policies that would push the debt beyond current projections — largely because their proposed tax cuts would outweigh spending cuts.
Republicans roundly criticize President Obama for running up the nation's debt. But it will continue to climb if a Republican takes the White House — and perhaps faster than under Obama's proposed policies, a budget watchdog group said Thursday.
GOP presidential hopefuls Mitt Romney, Newt Gingrich and Rick Santorum are promoting policies that would push the debt beyond current projections — largely because their proposed tax cuts would outweigh spending cuts. Only Texas Rep. Ron Paul's plans would begin to decrease the debt sharply, according to a report by the nonpartisan Committee for a Responsible Federal Budget.
The analysis shows how difficult it will be for any president to change the trajectory of the debt. And it underscores the need for bipartisan efforts to increase revenue and curb spending, particularly as an aging population is about to drive up Medicare costs drastically, the group said.
"I don't think cutting revenues further is the responsible thing to do — and they all do it," said Alice Rivlin, a director the budget watchdog group that released the analysis. "We're not going to be able to absorb this tsunami of seniors and their need for health care with the revenue we have."
Rivlin is the founding director of the nonpartisan Congressional Budget Office (CBO). Advisers in the study include many Democratic deficit hawks and Republicans unafraid to advocate for higher taxes.
The group acknowledged plenty of wiggle room in the study since many of the candidates' proposals are vague or haven't been reviewed by official sources, such as the CBO.
The GOP candidates' budget plans provide a contrast with Obama, whose 10-year fiscal blueprint includes proposals to increase taxes on the wealthy.
Like Obama, the Republican candidates have the luxury of suspending political reality and assuming lawmakers would enact their ideas into law quickly.
That translates into a tax code in which taxes on investments and capital gains would be reduced sharply or eliminated. Each candidate would eliminate estate taxes. Rates on individuals also would be cut, all in the face of deficits that economists say would swell the current $15.4 trillion debt and cripple the economy eventually.
Obama's proposals also would push debt above what experts say is sustainable.
The nation's debt load typically is measured as a portion of the economy, or gross domestic product (the sum of all goods and services produced in a year) — with 60 percent an internationally accepted level of debt. The so-called public debt, which excludes transfers among government accounts, is about 70 percent of GDP.
Under Obama, the public debt is expected to increase over 10 years, to 80 percent of GDP, according to an earlier analysis by the group. That projection was based on his proposals, including ending the George W. Bush-era tax breaks for those earning beyond $250,000 a year.
For its analysis of the GOP candidates, the group compared campaign proposals to existing policies, and those it assumes will occur, including continuation of the Bush-era tax cuts.
The budget group didn't take into consideration the Republicans' proposals to slow Medicare costs, because the effect of those changes would be at least a decade away. GOP assertions that tax cuts would pay for themselves by spurring economic growth also were dismissed.
Under that baseline, the group said, the debt would reach 85 percent of GDP by 2021.
Gingrich has noted the federal budget was balanced when he was House speaker. But the budget group said the policies he promotes now, including spending on space exploration, would increase the national debt by an additional $7 trillion over the baseline over 10 years to 114 percent of GDP. Santorum's policies would drive up the debt by an additional $4.5 trillion, to 104 percent.
The red ink would gush less heavily under Romney, the report said — at least under his earlier proposals that paired $1.35 trillion in tax cuts with $1.2 trillion in spending reductions.
But the picture changed Wednesday, when Romney tacked to the right and proposed to cut income-tax rates by an additional 20 percent for all earners — an idea that easily could slash revenues by an additional $3.5 trillion over 10 years, said Edward Kleinbard, a University of Southern California law professor and former chief tax analyst for Congress.
In a late-night addendum Wednesday, U.S. Budget Watch analysts set a slightly lower price for the new tax provisions, suggesting Romney's entire budget framework would add about $2.6 trillion to the debt by 2021.
Only Paul emerged as a fiscal conservative in the report. His policies would cut tax revenues by more than $5 trillion over 10 years, the report said, offset by more than $7 trillion in spending cuts. Paul's budget plans include eliminating five Cabinet departments, immediately ending operations in Iraq and Afghanistan, and sharply cutting programs such as Medicaid and food stamps.
By the end of fiscal 2016, little more than a month before Election Day, the deficits would look like this: Paul, nearly $500 billion; Gingrich, nearly $1.5 trillion; Santorum, $1.2 trillion; Romney, $700 billion to $800 billion. Obama's budget claims a $649 billion deficit by 2016.
The group didn't publish specific deficit figures for 2016 but provided estimates of them as a percentage of GDP to The Associated Press, which calculated them based on CBO economic estimates.
Compiled from the Tribune Washington bureau, The Associated Press and The Washington Post