Here’s the rap on the presidential candidates’ plans for cutting federal deficits: Mitt Romney’s is too bold and the numbers don’t add up, while President Barack Obama’s is too timid and his numbers don’t add up, either.
As the government closed the books earlier this week with a $1.1 trillion deficit for the year, which required borrowing 32 cents for every dollar it spent, budget analysts have little confidence in either man’s plan to address the accumulating debt, now at about $16 trillion.
The Republican nominee promises to balance the budget in eight years to 10 years, but he also offers a mix of budgetary contradictions: higher Pentagon spending, restoring cuts that Democrats made in Medicare and an absolute refusal to consider tax increases.
To fulfill his promise, Romney would require cuts to other programs so deep — under one calculation requiring cutting many areas of the domestic budget by one-third within four years — that they could never get through Congress.
In other words, it wouldn’t work.
Obama claims more than $4 trillion in deficit savings over the coming decade. But it you peel away accounting tricks and debatable claims on spending cuts, it’s more like $1.1 trillion. Republicans say it’s even less because of creative bookkeeping used to mask spending on Medicare reimbursements to doctors.
The accounting gets tricky, but the biggest faults with Obama’s math are his claims of more than $2 trillion in savings from earlier budget deals with Republicans and an additional $848 billion in savings from winding down of the wars in Afghanistan and Iraq.
“You can’t find a $4 trillion number,” said Douglas Holtz-Eakin, a conservative who once led the Congressional Budget Office.
Obama promises relatively small cuts of $597 billion from big federal benefit programs such as Medicare and Medicaid over the next decade while proposing tax increases of $1.9 trillion that he couldn’t push through Congress when Democrats controlled both the House and Senate.
Obama’s performance on the deficit should be his Achilles heel. The deficit has exceeded $1 trillion each year on his watch. He gave a cold shoulder to his own special deficit commission. Whatever efforts have occurred over the past two years to curb the deficit have come under pressure by Republicans.
“The American people see the financial chaos. They know it must stop. They know their families are at risk, and that their country is in danger,” Sen. Jeff Sessions, RAla., said in a recent GOP radio address. “Yet the president does not rally the country to action. Instead, he says our debt course is nothing to worry about.”
Romney offers a set of principles and promises rather than a detailed plan. He pledges to shrink the government to 20 percent of the size of the economy, as opposed to more than 23 percent of gross domestic product now, by the end of his first term. The Romney campaign estimates that would require cuts of $500 billion from the 2016 budget alone.
Romney proposes saving hundreds of billions of dollars over the coming decade by following House Republicans’ plan to sharply cut federal spending on Medicaid health care for the poor and disabled, and turn it over to state governments. He pledges to cut the federal workforce by 10 percent.
But Romney also promises large budget increases for the Pentagon and rejects a plan by his running mate, Rep. Paul Ryan, R-Wis., that endorses more than $700 billion in cuts to Medicare that were made as part of Obama’s health care law. Social Security is off the table.
That means big cuts to what’s left over: nuts-and-bolts government agencies including the FBI, Federal Aviation Administration and Border Patrol; programs such as food inspection and space exploration; and popular subsidy and benefit programs for farmers, veterans and college students.
The liberal-leaning Center on Budget and Policy Priorities calculates that Romney’s budget outline could require a one-third cut in domestic programs by 2016, excluding Social Security and Medicare, to make the math work. By 2022, such programs would have to be cut by more than half.
“You have to have large cuts in the rest of the non-defense budget, very large cuts,” said Paul Van De Water, an analyst at the budget think tank. “Whether it’s politically and practically achievable is subject to question.”
Romney also is light on details on his tax cut proposal.
He says he wants to cut rates by 20 percent, but won’t specify how he’ll find the $5 trillion required to pay for it. For all the rhetoric of tax loopholes and cleaning up the tax code, finding that kind of money would require looking at popular deductions and tax breaks for the middle class. Those include deductions for mortgage interest, charitable contributions and state and local taxes, and breaks for college savings, employer-paid health insurance and families with children.
Tax experts say he could very well come up short.
Obama’s budget has a lengthy and detailed mix of initiatives. But other than raising $1.4 trillion over a decade by allowing George W. Bush-era tax cuts on family income exceeding $250,000 to expire, they’re mostly small-bore ideas.
There’s little in the way of political danger. For instance, his budget would permit the cost of both Medicare and Medicaid to double over the coming decade. He offers cuts to health care providers, but asks no sacrifice from beneficiaries.
In private negotiations last year with House Speaker John Boehner, R-Ohio, that failed, Obama displayed some willingness to take on Medicare’s problems by raising from 65 the age to qualify for benefits. A “grand bargain” to get the debt under control would require him to go further.
“What he’s put on the table is insufficient to get us to the goal,” said Robert Reischauer, a former Urban Institute president and one-time director of the Congressional Budget Office who is one of the trustees for who oversee Social Security and Medicare. “He’s going to have to ramp up the game after the election if he really wants to stabilize the debt in a reasonable length of time.”
Associated Press writer Andrew Taylor has covered Congress and fiscal policy for The Associated Press since 2005.