Why GOP candidates would make the national debt worse
Republican Presidential candidates say–all the time–that they hate budget deficits. A linchpin of each of their campaigns is a promise to slash government and eliminate the deficit and the national debt. So which one of them would accomplish this ambitious goal?
According to a new analysis from the non-partisan Committee for a Responsible Federal Budget, none of them would. At least not through the next decade. In fact, compared to what the fiscal watchdog calls a realistic budget baseline (that is, if the government continues on the track it’s on today) all of the GOP candidates, save for Ron Paul, would make matters worse.
Rick Santorum and Newt Gingrich would make things far, far worse. Mitt Romney’s tax and spending plan wouldn’t bend the debt curve very much one way or the other. But, according to CRFB, if he doesn’t find a way to pay for his latest plan to cut tax rates by 20 percent Romney would significantly increase deficits and the debt as well.
Except for Paul, each of the candidates has the same problem. They have enthusiastically promised to cut taxes in very specific ways—sometimes by vast amounts. But when it comes to offsetting spending reductions or cuts in tax breaks, they mostly offer little more than platitudes.
A few numbers: The group figures that if government policy stays on track, the national debt would grow from 78 percent of Gross Domestic Product today to 85 percent in 2021. Paul would pare that to about 76 percent.
With Romney, the debt would change little from the CRFB baseline but only if he finds tax hikes to offset those 20 percent rate cuts. He has not said what those revenue increases would be, and without them, he’d add about $2.6 trillion to the debt and drive it to about 96 percent of GDP. Santorum would increase the debt by $4.5 trillion to 104 percent of GDP. Gingrich would add $7 trillion to the debt and drive it to 114 percent of GDP.
Some caveats: CRFB compares the campaign plans to a baseline that assumes 2001/2003/2010 tax cuts are permanently extended, the Alternative Minimum Tax “patch” continues to protect millions of middle-class families, the legislated cut in Medicare physician payments never happens, spending on the wars in Iraq and Afghanistan gradually comes to an end, and the automatic spending cuts that are due to kick in at the end of this year will be canceled.
In addition, the analysis does not assume any economic growth from the candidates’ proposed tax rate cuts though some is possible. It also looks only at the next nine years, and not over the long run. The group calculated a high- low- and intermediate- range of deficit effects for each candidate. I’m citing the middle-range.
The group acknowledges its effort is a work in progress and it will revise its estimates as campaign promises change over the next eight months. Finally, CRFB did not score President Obama’s agenda in today’s exercise, but will once the general election is underway.
Cutting the national debt should not be the only goal of any president. Stuff happens, as you may have noticed in recent years. We fight wars. The economy collapses. Priorities change.
But with these candidates making the deficit such a big part of their campaign rhetoric, the CRFB scorecard is a very useful reality check. Give it a read.
