Now that the election is over, it’s time to get working again on our nation’s problems. President Obama and Mitt Romney sure did a lot of talking about what was wrong with the other guy, but neither has really explained how they want to fix anything. Neither Romney nor Obama presented a reasonable (much less tangible) game plan for how our deficit and debt will be tackled. Instead, only generalities have been suggested.
Republicans needed to portray an image of financial responsibility this year, as the economy has remained such a big part of our national discussion. When it became clear by primary results that Mitt Romney would become the eventual nominee, his campaign quickly began to draw criticism from different factions within the GOP, namely the TEA Party and Ron Paul supporters. The Republican Party as a whole would need their vote come November, so the running mate pick became more important than usual. This scenario came up in 2008 as well, resulting in the pick of Sarah Palin as VP contender. (Which also, by the way, didn’t work.)
This brings me to what was basically the biggest specific problem I had with the Romney plan. Let’s take a look at what Mitt Romney actually said and put on his campaign website concerning what he wanted do as president for our fiscal problems.
The Problem with the Plan
Romney repeated in his last debate that he planned to cut 5% “across the board” from federal spending. That sounds great when you first hear it, except that he clarified by saying the cut was to non-security discretionary spending. What does that mean? Well, I did the math a couple of months ago, and cutting non-security discretionary spending by 5% only cuts about $20 billion from the overall federal budget. This was Romney’s position prior to choosing Paul Ryan as his running mate, which was an attempt to appeal to the more conservative voters within the Republican Party. Paul Ryan was previously known for his budget proposal, released in 2010. It deals with our deficit and actually balances – in about 30 years or so, but still it does eventually balance. Romney’s pick of Ryan made many Republicans think a Romney presidency would be aggressive on spending reduction, but in the last debate Romney indicated he did not plan to actually use Paul Ryan’s budget. Instead he went back to this 5% of non-security discretionary spending thing.
So what does a 5% cut actually look like? In order to have a balanced budget as a country, we need to cut around $1 trillion of spending per year. The deficit, at the time I first ran the numbers was $3.7 trillion vs. $13.5 trillion of GDP, or in other words the deficit is about 27% our country’s GDP. Romney’s ultimate goal was to drop federal spending to below 20% of GDP. A 7% drop in spending would require a $945 billion spending cut with production levels staying at least the same.
Paul Ryan’s budget plan could eventually accomplish this, but it was never actually on the ticket.
That is a huge problem, not only for Republicans in the election, who were largely not impressed with his plan, but also for the country as a whole because his opponent didn’t even have a plan other than raising taxes on high-income earners, which doesn’t bring in anywhere near enough new revenue, even if GDP stays the same.
The Party’s Direction
Right now our country needs a huge influence of conservative financial leadership, but the so-called conservative party hasn’t been presenting a conservative game plan. I’m not expecting anyone in Washington to have the whole place fixed in a year, but we need to see the Republican Party listen to its members instead of running the same old establishment candidates year after year.
There is a lot of talk about where will the GOP go from here, and whether the party will keep its political prominence as it has enjoyed for the last century.
*Sources for Mitt Romney’s budget numbers:
- http://www.mittromney.com/issues/spending (Before it was taken down and now redirects to a farewell message)