How much will Romney really slash the budget?
Mitt Romney is proposing deep spending cuts that would cap federal spending at 20 percent GDP. That means slashing Social Security benefits and pushing 2.6 million additional Americans into poverty.
My CBPP colleagues have crunched some important numbers documenting the impact of Gov Romney’s fiscal plans. To me, their piece is the latest example of a truism in this biz: it’s easy to brag about how deeply you’re going cut if you stay up in the clouds; when you get down to earth…not so much.Skip to next paragraph
Before joining the Center on Budget and Policy Priorities as a senior fellow, Jared was chief economist to Vice President Joseph Biden and executive director of the White House Task Force on the Middle Class. He is a contributor to MSNBC and CNBC and has written numerous books, including 'Crunch: Why Do I Feel So Squeezed?'
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The Gov’s problem starts with his proposal to cap federal spending at 20% of GDP (i.e., he could go lower, but he won’t go higher) and at the same time, increase defense spending to no less than 4% of the economy.
That leaves…um…let me see…carry the naughts…ahh—I’ve got it!: 16% of GDP for everything else!
As Jon Cohn pointed out last week, this implies massive spending cuts. From our report:
–If policymakers spread these cuts proportionately across all nondefense programs — including Social Security and Medicare — they would have to cut every program by 17 percent in 2016 and 24 percent in 2021.
–If policymakers protected both Social Security and Medicare, they would have to cut other programs 34 percent in 2016 and 50 percent in 2021.
What do such cuts mean to actual people? Well, cutting Social Security benefits by 17% by 2016 would reduce the average monthly benefit from $1,230 to $1,020 and push more than 2.6 million additional people into poverty. But Gov Romney has said he wants to protect current retirees and those 55 and up (like me!) from such cuts. Doing so would push that 17% to 24%, and put Medicaid and Medicare right in the crosshairs:
–Medicare would be cut by $153 billion in 2016 and $1.4 trillion through 2021. Achieving cuts of this size solely through reducing payments to hospitals, physicians, and other health care providers would threaten beneficiaries’ access to care. Thus, beneficiaries would almost certainly face large increases in premiums and cost-sharing charges.
–Medicaid and the Children’s Health Insurance Program (CHIP) would face cumulative cuts of $946 billion through 2021. Repealing the coverage expansions of the 2010 health reform legislation, as Governor Romney has proposed, would achieve more than the necessary savings. But it would leave 34 million people uninsured who would have gained coverage under health reform.
–Cuts in the Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamp Program) would throw 10 million low-income people off the benefit rolls, cut benefits by thousands of dollars a year, or some combination of the two. These cuts would primarily affect very-low-income families with children, seniors, and people with disabilities.
–Compensation payments for disabled veterans (which average less than $13,000 a year) would be cut by one-fourth, as would pensions for low-income veterans (which average about $11,000 a year) and Supplemental Security Income (SSI) benefits for poor aged and disabled individuals (which average about $6,000 a year and leave poor elderly and disabled people far below the poverty line).
As you see, such proposals may look pretty from the clouds, but on the ground, they provide a stark reminder of just what’s at stake in the forthcoming election.
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