As election day approaches, it is appropriate to look at what we know and what we don’t know about the two candidates’ fiscal policy proposals — especially since we are unlikely to get any more details before the election.
In many respects, the crucial differences between the candidates are defined by their fiscal policies, and it is almost certain that the winner’s fiscal choices will be as immediately consequential as any president’s in history.
In two new blog posts, Concord Coalition Policy Director Joshua Gordon evaluates the candidates’ proposals in three key areas: The overall budget goal, tax policy and health care.
Governor Romney’s fiscal policy proposals, as analyzed in the first post, lack detail and make promises that simply do not add up. With Romney proposing to balance the budget within eight to ten years, while rejecting the framework of budget plans like Simpson-Bowles or Domenici-Rivlin – which both increase revenues and cut spending — the math becomes difficult, and likely impossible.
Romney’s tax proposals to reduce rates, reduce taxes on people earning below $250,000, and pay for those reductions through reducing tax expenditures for the wealthy, do not add up. This problem is compounded by his call for higher defense spending and repeal of the Medicare cost savings in the Affordable Care Act. Romney has not provided sufficient detail to demonstrate that enough offsets can be found through spending cuts and tax reform to balance the budget.
Obama, as President, has been required to submit budgets that provide more details. Yet they clearly show an inadequate long-term fiscal goal. Over 10 years, federal debt held by the public would only stabilize temporarily, and at a higher level than it is today.
To the President’s credit, he supports negotiating a long-term, bipartisan “grand bargain” on fiscal issues with both spending cuts and new revenues. Unfortunately, during the campaign, he has taken some Social Security and Medicare options off the table — making a bargain more difficult.
On taxes, the President has been contradictory, calling for more revenue yet ruling out tax increases for anyone earning less than $250,000. He has proposed new tax breaks even while arguing that others should be scaled back. He has not supported a broader fundamental reform in which major tax expenditures are eliminated or scaled back and better targeted.
Obama has framed his policy choices as countering his opponent’s instead of offering proposals that substantially advance any comprehensive march towards fiscal responsibility. While the politics of this strategy might be rewarding over the short term, it leaves voters with questions about whether there is a vision for longer-term sustainability.
The lack of key details in the candidates’ major campaign proposals is problematic. The public should have all the information possible prior to voting. When fiscal goals are in tension, recent history has shown that the goodies like tax cuts and spending hikes tend to get passed, while the hard stuff — like eliminating tax breaks to pay for things — tends to never happen, leaving large deficits.