Romney's Economic "Plan" in Brief

According to a recent poll, registered voters trust Mitt Romney more than Obama when it comes to managing the economy. Partly, this can be explained by the fact that the economy is still sputtering, with an 8.2% unemployment rate and slow GDP growth. Another cause may be the fact that hardly anyone knows what Romney actually has in store for our country's economy.

With that in mind, here's a brief rundown of the economic components of Romney's plan and its effects, budgetary and economic.

To put it simply, Romney combines Paul Ryan's economic plan, the tea party demands for "cut, cap and balance," and replaces Ryan's call for a reduced rate of increase in defense spending with a massive increase of 66% above current levels.

• Massive tax cuts, overwhelmingly to the richest 1%:
• Making the Bush tax cuts (all of them) permanent
• Cutting tax rates 20% across all brackets
• Elimination of the estate tax
• Elimination of the Alternative Minimum Tax (AMT)
• Reduction of corporate tax rate from 35% to 25%
• Elimination of corporate tax loopholes to offset the rate reduction above
• Changing corporate taxation so corporate earnings overseas are not taxable in the US

• Cap on federal spending at 20% of GDP (federal budget is now 24% of GDP)

• A huge increase in defense spending

• Repeal of Affordable Care Act

• Repeal of Dodd-Frank financial regulatory reform law

• Turning Medicare into a voucher system

• Turning Medicaid funding into block grants

• Balanced Budget Amendment to the Constitution

Key Points:

• Total reduction in federal revenues from the above: $10.7 trillion over 10 years.

• Eliminating tax loopholes won’t be enough to offset the huge loss of federal revenues. 

• To grow our way out of the deficit, as Romney claims, would require the economy to grow twice as fast--every year--as it has historically (on average). No credible economist thinks this can happen.

• The GOP is against raising any tax, of any kind, at any time. 

• So the only options are enormous budget cuts or even bigger deficits and much deeper debt.

What would be the economic effects of such huge budget cuts? To get an idea, look at what’s happening in the Eurozone. Drastic budget cuts have left the UK in a longer period without economic growth than during the Great Depression, and the UK has just gone back into recession. The unemployment rate in Spain is now 25%--for workers under age 25, it’s 50%. Ireland, Portugal and Greece are in recession, the latter having become an economic basket case with no hope of revival. 

Or consider this: Last summer's debt ceiling debacle led to an agreement in which huge cuts in domestic spending (17%) and defense spending (15%) would kick in automatically (a "sequester") if a congressional supercommittee failed to reach a deal on raising the debt ceiling and cutting the deficit. Republicans refused to allow tax increases of any kind and the deal fell apart. The non-partisan Congressional Budget Office has concluded that the combination of the sequester and expiration of the Bush tax cuts would push the economy back into recession for the first half of 2013, regardless who is in the White House. Or, to put it another way, withdrawing a large amount of money from an already weakened system is exactly the opposite of what should be done when economic activity has declined significantly.

Is that the kind of economic future we want?

Conservative Complaints about Obamacare--Deficits, Universality, Bipartisanship

A conservative comments on a friend's Facebook page:

I think most Conservatives are concerned that the plan offered will increase the debt, increase taxes, increase costs of healthcare for many, and was the furthest thing from a bipartisan effort. Everyone agrees that healthcare needs reforming, but there was little attempt to come up with a plan that works for both sides and contains costs. And, I think that most Conservatives disagree with Romney's assertion that the individual mandate is the answer... I, and many others, believe that it is an unconstitutional over-reach of federal powers. Even SCOTUS agreed that this was an unconstitutional used of the Commerce Clause. SCOTUS then said that this was constitutional based on Congress' taxing authority. Even Obama knew that backing the mandate with a tax would not be tenable. So, he did everything possible to convince everyone that it was a "penalty" rather than a "tax".

In re constitutionality, you have no argument, agreeing in your own comments above that the SCOTUS has declared the ACA constitutional. Whether the mandate is defined in re commerce or as a tax is a political decision, as it was for Romney when he instituted basically the same plan in Massachusetts.

Let's look at the rest of the points raised.

Debt & Deficits: The Congressional Budget Office (CBO) analyzed the Affordable Care Act & found it will produce a "net reduction in federal deficits of $143 billion over the 2010-2019 period." This is because the bill was crafted according to "Pay-go" rules in Congress, which were abandoned when the GOP regained control of the House.

Universality: The ACA does not result in universal health care. Neither did the GOP bill authored by Dave Camp. In fact, Kaiser Health News compared it to the Affordable Care Act & the 1993 GOP health care reform bill. It found that the Affordable Care Act is almost identical to the 1993 GOP bill. 

The November 2009 GOP bill:

• Makes Efforts To Create More Efficient Health Care System
• Includes Medical Malpractice Reform
• Prohibits Insurance Company From Cancelling Coverage
• Prohibits Insurers From Setting Lifetime Spending Caps
• Extends Coverage To Dependents (up to age 25)
• Would cost $8 billion over 10 years
• Reduces by deficit by $68 billion over 10 years
• Would have covered 82% of Americans by 2019

By contrast, the Affordable Care Act does the following:

• For Insurance Of Self-Employed
• Extends CoverageRequire Individuals To Purchase Health Insurance (this obviously is the most unpopular part)
• Requires Employers To Offer Health Insurance To Employees
• Provides Standard Benefits Package
• Bans Denying Medical Coverage For Pre-existing Conditions
• Establish State-based Exchanges/Purchasing Groups
• Offers Subsidies For Low-Income People To Buy Insurance
• Long Term Care Insurance
• Makes Efforts To Create More Efficient Health Care System
• Medicaid Expansion
• Reduces Growth In Medicare Spending
• Controls High Cost Health Plans
• Prohibits Insurance Company From Cancelling Coverage
• Prohibits Insurers From Setting Lifetime Spending Caps
• Equalize Tax Treatment To Dependents
• Cost: $871 billion over 10 years
• Reduces by $132 billion over 10 years (the CBO has since revised this estimate up to $230 billion)
• Will cover 94% of Americans by 2019

Then there's the Romney plan. Romney (1) won't act to reduce the number of uninsured; (2) will turn Medicaid funding into block grants, making the program vulnerable to, say, increased demand due to recessions; (3) use tax incentives to move people from employer-sponsored to private insurance; (4) encourage state-level risk pools--with less market power than a national pool; (5) eliminate parents' ability to cover children up to age 26; (6) allow denial of coverage due to pre-existing conditions--to those not already insured; (7) implement all of the above incrementally--essentially verifying that there won't be anything systematic about the resulting "system." Look at all this & ask yourself who gains & who loses. 

Bipartisanship: In a bipartisan process, Jon Perr outlines the 20-year GOP campaign to prevent health care reform.

I'd add to that record the following:

• 15 top Republican congressmembers met--on Inauguration Day--to plot out a plan to obstruct Obama's agenda--across the board. 
• Rush Limbaugh inaugurated the campaign of obstruction the day after Obama's inauguration with his declaration that "I hope hefails." 
• Eric Cantor declared on February 9, 2009, that the GOP strategy would be "justing say no" to everything. 

Note also that health care reform was one of the major issues in the 2008 campaign, and was discussed extensively during that campaign by Democrats & was argued extensively in Congress & across the country during the 18-month legislative process that ended with the bill being signed into law. And when Dave Camp's bill was introduced, the GOP congressional leadership didn't put its support behind it. Why? See above.


UPDATED: I included links in the last bulleted list & cleaned up some spacing irregularities.