That Mitt Romney's economic plans are slapdash is practically beyond argument. (To see just how slapdash, read Josh Barro on his tax proposal and Glenn Kessler on his jobs proposal.) The question is why.
One possibility is that Romney, an MBA who made a fortune in private equity before becoming governor of the home state of Harvard and MIT, is a moron who has surrounded himself with other morons. This strikes me as unlikely.
So let's consider another option: Romney's plans are sloppy for strategic reasons. Specifically, Romney wants to obscure his intentions and avoid the grand "clash of visions" that some commentators predicted would mark the 2012 election.
I'll take Door No. 2.
The next question, then, is what Romney's intentions are. Jonathan Chait, one of the most strategically smart (and entertaining) political journalists around, predicts that Romney would use the first days of his presidency to ram through a radical overhaul, gutting the welfare state and cutting taxes for the wealthy. Under this scenario, Obamacare is repealed, Medicare is voucherized, Medicaid is starved and shipped off like a poor relation to the states, and regulations are slashed. The federal government, its pockets punctured and tattered, eventually becomes the Pentagon, Social Security and a few embassies.
Under Romney, Chait views the budget plan proposed by vice presidential nominee Paul Ryan as virtually a done deal:
One might suppose that at least a handful of Republicans might blanch at the prospect of reshaping the entire face of government unilaterally. But Ryan’s careful organizing of the party agenda has all taken place with this vote as the end point, and with the clear goal of sidestepping any such objection. When Republicans won control of Congress during the 2010 elections, Ryan successfully lobbied the party to take a vote on his budget plan the following April. The plan stood no chance of passage (given Obama’s certain veto) and exposed dozens of vulnerable House members to withering attacks over its unpopular provisions. So why hold a vote carrying huge potential risk and no chance of immediate success? So Ryan could get the party on record supporting his plan, depriving quiet dissidents of any future excuse to defect should the real vote come in 2013.
Ryan's vision of a smaller government with drastically curtailed obligations to the most vulnerable is, of course, a long-cherished goal of many conservatives. But I'm having trouble seeing it. Or at least seeing all of it.
It looks like the economy is finally rebounding, with household balance sheets improving and the housing market growing stronger. The next president seems likely to preside over at least a modest recovery. So Romney would not only be able to cut taxes on the wealthy, but he would also be able to attribute any economic improvement to his tax cuts. Supply-side fiscal policy would be redeemed, and Romney donors -- many of whom are quite certain that the key to economic growth is cutting their own taxes -- would rejoice. However, too big and too rapid a contraction of federal spending would put that ideological victory in jeopardy -- along with the seats of some Republican legislators in the next midterm election. It's a pretty big gamble.
Without Obama, destroying Obamacare seems eminently doable. Demolishing the older edifices of the welfare state, however, is a more complicated undertaking. The dream of eliminating New Deal and Great Society programs tends to get bogged down in a crude reality: Voters like them. They especially like Social Security and Medicare, and many middle-class families depend on Medicaid to pay for nursing home care for elderly parents.
Ryan's plan acknowledges as much, approaching middle-class entitlements with a scalpel while wielding a hatchet on programs for the poor. His big changes to Medicare are delayed for a decade in order to mute opposition. It's not hard to imagine them being delayed indefinitely once the issue is engaged and the prospect of change is real. Middle-age voters, their outrage piqued and their futures suddenly looking less secure, will need to be appeased.
If the middle class is spared, the budget cuts will focus solely on the poor. Of course, if benefits for the poor were so lavish, the poor wouldn't be poor. (Come to think of it, Robert Rector of the Heritage Foundation has been making precisely that argument -- poor people aren't poor -- for decades.) Still, let's stipulate that the poor are at least sort of poor. So the money saved from reducing their benefits certainly wouldn't be enough to pay for new tax cuts and also balance the budget.
The obvious solution? Tax reform! Romney has said he will close loopholes like nobody's business. Everything's on the table, though it's all under a tablecloth. According to this view, once the election season of demagogy has ended and a new regime is installed, members of Congress will start hacking away at exemptions and lowering rates.
How about it, Marco Rubio? The Republican senator from Florida, perhaps the party's biggest rising star, was asked more than once at a meeting at Bloomberg View this week to name loopholes he would close. Unsurprisingly, he declined. And he didn't just duck the question, he drove a stake through it. He was all for tax reform, he said, but with a few caveats: He wouldn't be willing to eliminate the mortgage-interest deduction, the charitable-giving deduction or the exemption for health insurance.
Rubio did not say these were the only loopholes he would like to keep. But even if they were, he's pretty much given away the game here. A self-described fiscal conservative, Rubio has already caved on tax reform before the election is even over.
So here's where things stand:
1. Tax cuts that are wildly popular with Romney's base are about the only concrete promise he has made.
2. Costly middle-class entitlements like Social Security and Medicare are wildly popular with voters, and politicians from both parties enjoy being re-elected.
3. The loophole closures that would make Romney's tax cuts less fiscally reckless are unpopular -- even with the likes of Marco Rubio.
4. The working poor, the chief beneficiaries of Obamacare, and the nonworking poor, who benefit from Medicaid, are relatively easy targets.
This doesn’t sound to me like the makings of a real revolution. It sounds like some poor people will be in for a very rough time, and will be denied the benefits of Obamacare before they even taste them, though others may find jobs in an improving economy. The federal government will be nipped and tucked but otherwise look not much different than it looks today, complete with big middle-class benefits for homeowners and the elderly.
Oh, and one other thing: Deficits will grow very, very large. But it's not as if Republicans care too much about that. Or rather, they just believe that reducing deficits is a job best left to Democrats.
(Francis Wilkinson is a member of the Bloomberg View editorial board. Follow him on Twitter.
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