Overview. If you want your next president to be a deficit cutter – and many Americans do – former House Speaker Gingrich might be your last choice. He derides the word "austerity" and focuses unabashedly on reviving economic growth through tax cuts and other conservative policies. Unlike other candidates, he proposes tax cuts that outweigh his spending cuts under each of the three scenarios calculated by the CRFB.
The results. National debt would rise to 97 percent of GDP by 2021 under the "low-debt scenario." That's a big rise compared with status quo policies in which public debt rises to 85 percent of GDP. The jump is even worse under the "intermediate-debt scenario," with debt reaching 114 percent of GDP.
Why his plan gets there. The impact of Gingrich tax cuts on federal revenues would be large. And it would vary depending on how his proposal for a voluntary flat income tax of 15 percent plays out as an alternative to the traditional income tax. Mr. Gingrich also would eliminate estate taxes and capital-gains taxes and would lower corporate rates.
His spending policies, as tallied by the CRFB, would cut federal spending overall, but not by an amount equal to his tax cuts. He would reduce Medicaid spending by block-granting the program to states. He would eliminate most education spending.
Some of Gingrich's plans involve new spending. His goal of establishing a moon base and a mission to Mars would push federal spending up by perhaps $270 billion. His plan to offer private accounts for Social Security would also add to future deficits.
