In his speech to CPAC, Mitt Romney repeated a promise that he’s delivered repeatedly on the campaign trail. “Without raising taxes or sacrificing America’s critical defense superiority, I will finally balance the budget.” That sounds pretty good. It sounds really good, in fact. And then you look at the numbers.
Romney has, essentially, made four significant fiscal promises: He has pledged to cap federal spending at 20 percent of GDP. He has pledged to cut taxes to about 17 percent of GDP. He has pledged to a floor on defense spending at 4 percent of GDP. And he has pledged to balance the budget.
So let’s add it all up: Romney has to cut federal spending down to 17 percent of GDP. Federal spending is currently at 24 percent of GDP, and the Congressional Budget Office predicts that it will be around 22 percent for the next decade. For comparison’s sake, Paul Ryan’s budget would keep spending above 20 percent of GDP for at least the next 20 years.
That’s a lot of numbers, so here’s the bottom line: Romney is proposing to cut more than twice as much from the budget as Ryan. And Ryan’s budget, as you’ll remember, was already quite austere.
Romney is clearer in his goals for the federal budget than he is in how he’ll achieve them. But he has offered enough detail that we can estimate the cuts required to meet his targets. In that spirit, the Center on Budget and Policy Priorities tried to run the numbers on Romney’s proposals. The results were so outlandish that they actually ran them two ways to make Romney look better.
In the first scenario, Romney follows through on his promise to balance the budget and cuts spending to 17 percent of GDP. If you assume Romney is balancing the budget by 2021 — the end of his second term — that requires cutting expected spending on every domestic program, including Social Security and Medicare, by 36.4 percent. If Social Security is spared, as Romney has suggested it will be for the next 10 years, that rises to 53.4 percent.
In the second scenario, Romney ignores his promise to balance the budget and simply tries to cap spending at 20 percent of GDP. Then, the required cuts to domestic programs are only 23.5 percent. And, if Social Security is spared, 34.5 percent. This is the scenario Romney tends to reference in his speeches, when he says that “to reach the 20 percent goal, we’ll need to find almost $500 billion in savings a year in 2016.” But, again, in his CPAC speech, he promised to balance the budget, which would require matching spending to the 17 percent of GDP he’s bringing in through tax revenues.