Why Romney's Budget Might Be Even Worse Than Ryan's

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Romney has avoided specifics, but even his two broadest, most public principles -- 20% cuts to marginal tax rates and 20%-of-GDP spending caps -- have clear and harsh conclusions

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Reuters

Mitt Romney's selection of Paul Ryan for Veep this weekend was supposed to make this a real debate about budget specifics. By Tuesday, both members of the ticket had distanced themselves from most specific details of Ryan's famous Roadmap.

It couldn't be any other way. Ryan's plan would level Medicaid spending by the end of the decade and cut deeply into projected income security payments and basic government duties. And that's before the controversial Medicare plan would start in the 2020s. Who wants to defend controversial line-items to seniors in Florida, or lower-middle-class rural voters in Iowa, when you could simply say: "Obama isn't working. And we have a plan."

Romney claims he'd rather talk about his own proposals -- "It's Romney/Ryan, not Ryan/Romney" his spokesmen remind news anchors -- but his budget might be even harder to defend, in any specific way, Suzy Khimm explained. The GOP presidential hopeful says he wants to cut between $400 and $500 billion from projected spending each year of his term to bring the budget into balance. But there's a catch. Romney doesn't want to cut defense, one-fifth of the budget. He won't enact Obama's cuts to Medicare, nearly another fifth. And he won't cut Social Security, another fifth. That leaves a little over two-fifths of the government -- or $1.4 trillion today -- to accept about $400 billion of cuts. The math is easy. It says that everything else that government wants to do -- welfare, bridges, food and drug safety, and so on -- it will just have to do with about 30% less.

You know how that's going to work out? It's not. We're not going to build a third fewer roads, or dump another third of low-income families from welfare, or cut science research by a quarter.

Conservatives have made two fine objections to this line of argument. One is that it's a fallacy to think that just because a government program has a noble-sounding purpose doesn't justify its level of funding. That's fair. Two is that the president's budget also makes unrealistic assumptions and also promises too much to his caucus. That is also true.

But neither the magnitude nor the direction of Obama's alleged unrealism is comparable to the Romney/Ryan budgets. For example, with serious fiscal hawks acknowledging that we need to raise revenues to close the deficit, Obama would raise taxes by about $100 billion per year while Romney has proposed to a plan that might cut taxes for the richest Americans who are most able to fund the government. Romney has said he would like tax reform to be nearly revenue neutral, but it is mathematically impossible to do so under his guidelines without raising taxes on the middle class or losing quite a lot of revenue overall. The most reasonable outcome from "revenue-neutral" tax reform under Romney's guidelines would raise tax rates on 95% of the country, according to the Tax Policy Center. Those earning $1 million would get a tax cut equal to almost twice the disposable income of the poorest 20 percent.

Romney has avoided being too clear about his tax and budget proposals. But even his two broadest, most public principles -- 20% cuts to marginal tax rates and 20%-of-GDP spending caps -- have clear and inevitable conclusions: Tax cuts for the richest and spending cuts for the poorest. If the math works any other way, show me how. Be specific.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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