Ryan, Like Romney, Piles Up Massive New Debt
In the wake of Mitt Romney's solid victory in Illinois, conservative columnist Fred Barnes proposed a Romney-Ryan ticket for the fall. That would be altogether fitting. After all, Romney didn't merely endorse the catastrophic GOP budget plan Paul Ryan unveiled Tuesday; he already laid out an almost identical blueprint. Stylistically, both Ryan the budget chairman and Romney the financier are both numbers guys. Sadly for their Republican cheerleaders, both men also happen to be terrible at math. As the numbers show, Paul Ryan and Mitt Romney would massively increase the national debt.
That may seem like a surprising result, given Rep. Ryan's declaration that his mission is to "prevent an explosion of debt from crippling our nation and robbing our children of their future." But even with his draconian budget blueprint that cuts Medicaid by a third, ends Medicare as we know it, adds 48 million people to the ranks of the uninsured and by 2050 would result in ending all non-defense discretionary spending, over the next decade Ryan would unleash torrents of red ink from the U.S. Treasury. Ezra Klein explained how Paul Ryan came up $6.2 trillion short:
The Tax Policy Center looked into the revenue loss associated with House Budget Chairman Paul Ryan's plan to cut the tax code down to two rates of 10 percent and 25 percent. They estimate the changes would raise $31.1 trillion over 10 years, or 15.4 percent of GDP. That's $10 trillion less than the tax code would raise if the Bush tax cuts were allowed to expire, and $4.6 trillion less than it would raise if all of the Bush tax cuts were extended.
The Republican congressman says he'll "broaden the tax base to maintain revenue...consistent with historical norms of 18 to 19 percent." So let's say Ryan needs to find close-enough deductions and loopholes to hit 18.5 percent of GDP. That means he'd need to close about $6.2 trillion in tax deductions and loopholes over 10 years.
And so far, Ryan hasn't had the courage to name a single deduction he would end or loophole he would close. As Matthew Yglesias pointed out, in Ryan's 13-page description of his tax reform vision, those politically tough choice are completely missing:
Thirteen pages dedicated to explaining his vision for revenue-neutral tax reform. And even so he manages to not name a single tax deduction that he's planning to eliminate. Home mortgage interest deduction? I dunno. Electric vehicle tax credit? I dunno. Deductibility of state and local income taxes? I dunno.
Rolling out his plan on Tuesday, Ryan admitted as much. The responsibility for making the numbers work and taking the heat for ending popular deductions would go to House Ways and Means Committee, which Ryan claimed would "show how they would go about doing this." It's no wonder Greg Sargent said Ryan's "Path to Prosperity" plan simply "is not serious" while the New York Times called it "careless."
And one other thing. Over the next 10 years, the Ryan House budget would add substantially more to the national debt than President Obama's proposed 2013 plan.
As the Center for American Progress explained, the Congressional Budget Office (CBO) assessment of the Ryan budget "did not test Rep. Ryan's claims about how his policies would actually affect spending or revenue," but "merely showed what would happen to the debt if his claims were true." In a nutshell, they are not:
But the House budget's entire claim to deficit reduction is built on the foundation of those fantasy revenue levels. Without them, the debt goes up, not down. In fact, with all the House budget's tax cuts properly accounted for, revenue would average just 15.3 percent of GDP from 2013 through 2022, not 18.3 percent. The result: deficits would never drop below 4.4 percent of GDP, and would rise to more than 5 percent of GDP by 2022.
The national debt, measured as a share of GDP, would never decline, surpassing 80 percent by 2014, and 90 percent by 2022. By comparison, President Barack Obama's budget proposal, released in February, would stabilize the debt by 2015, and bring it down to 76 percent by 2022.
If this all sounds familiar, it should. Because just last month, Mitt Romney also rolled out a new economic plan, one which similarly hemorrhages red ink.
As it turns out, Romney's scheme to "Cut, Cap and Balance" the federal budget does nothing of the sort. As the Washington Post explained in its discussion of an analysis by the Committee for a Responsible Federal Budget, "until the campaign offers a more specific plan, Budget Watch analysts said Romney's entire framework would add about $2.6 trillion to the debt by 2021."
Romney's claim that his plan would promote job and economic growth while reducing the deficit is also likely false. The Bush tax cuts were promoted under the same guise, only to blow a $2.5-trillion hole in the federal budget that was accompanied by worst performance of any post-war expansion" for growth in investment, GDP, and job creation. Romney's tax cuts are even more expensive, clocking in at a cost of more than $10.7 trillion over the next decade and reducing revenue to a paltry 15 percent of GDP, according to Linden. Balancing the budget on those terms, as Romney claims he will do, would be next to impossible.
Impossible, Ezra Klein points out, because "Mitt Romney is promising that taxes will go down, defense spending will go up, and old-people programs won't change for this generation of retirees." But even with his shocking cuts to Medicaid, Romney can't get anywhere near balancing the budget unless he eliminates some of the deductions for workers, families and businesses that cost Uncle Sam over $1 trillion a year. And like Paul Ryan, the certain Republican presidential nominee is too cowardly to say what they are.
Last month, His economic adviser Glenn Hubbard admitted Romney's cowardice, explaining "it is not his intention to take on any specific deduction or exclusion and eliminate it." Just two weeks later, Mitt Romney concluded discretion was the better part of valor and refused to reveal which deductions and tax breaks he would end:
"So I haven't laid out all of the details about how we're going to deal with each deduction, so I think it's kind of interesting for the groups to try and score it, because frankly it can't be scored, because those kinds of details will have to be worked out with Congress, and we have a wide array of options."
In response, the Post's Klein could only shake his head:
"Let's be clear on this: A tax plan that can't be scored because it doesn't include sufficient details is not a plan. It's a gesture towards a plan, or a statement of intended direction, or perhaps an unusually wonky daydream. But it's not a plan."
Romney's may not be a plan, but it is a recipe. A recipe, that is, for stagnation, suffering and massive debt.
As it turns out, everything you need to know about the economic plans of Mitt Romney and the other Republican White House hopefuls is conveniently contained in two headlines. In October, the McClatchy Newspapers revealed, "GOP presidential candidates' tax plans would benefit the rich." Last month, the Washington Post bookended that analysis with another finding, "Debt will swell under top GOP hopefuls' tax plans."
Now, you can add House GOP budget from would-be Romney running mater Paul Ryan to that list.