In last night’s presidential debate, Republican challenger Mitt Romney offered his plan for reducing the $1.1 trillion deficit. He proposed lowering taxes in a way that would be revenue neutral and reducing federal spending. But he offered few specifics on how he would implement it, which is a common problem when politicians discuss deficit reduction. Romney didn’t outline deductions and loopholes he would eliminate to make his tax plan revenue neutral. Certainly, though, there’s wiggle room there, because the U.S. leaves about as much revenue on the table from deductions and loopholes each year — $1.2 trillion — as it collects in taxes, according to the Tax Policy Center.
But revenue-neutral tax reform doesn’t get you a lower deficit. It gets you the hope that revenue will rise in the future and that additional money can be used to lower the deficit.
To battle the deficit on more immediate terms, Romney also proposed spending cuts.
“I will eliminate all programs by this test, if they don’t pass it: is the program so critical that it’s worth borrowing money from China to pay for it,” he said. “If not, I’ll get rid of it.”
OK, now let’s set aside for a minute the political reality that Congress has essentially already been doing this. Lawmakers seem to believe everything is worth borrowing from China for. Romney, after all, is on the campaign. He gets to say what he’d like to do, not what Congress is likely to let him do. So what cuts would he make?
Obamacare, he said, was at the top of his list.
“So I’d get rid of that,” he said. Then turning to moderator Jim Lehrer, a PBS newsman, he said: “I’m sorry Jim, I’m going to stop the subsidy to PBS. I’m going to stop other things….” And then he went on to qualify that he likes PBS and Sesame Street icon Big Bird. While that set the Twitterverse afire, it ignored the far, far bigger problem with Romney’s statement.
Most of the cost of the healthcare reform isn’t included in the current deficit. So even if you believe that eliminating it would reduce future spending — it could actually add to it because the law has projected savings for some healthcare-related costs — it does nothing to reduce the deficit. And PBS?
Astrophysicist Neil deGrasse Tyson, the director of the Hayden Planetarium at the American Museum of Natural History and host of Nova Science Now on PBS, tweeted that “cutting PBS support (0.012% of budget) to help balance the federal budget is like deleting text files to make room on your 500Gig hard drive.”
The federal subsidy for PBS is $444 million. That doesn’t even move the needle on deficit reduction. Later in the debate, Romney also said he’d cut subsidies for Amtrak — $1.42 billion — and the National Endowment for the Arts and Humanities — another $146 million. That’s a total of just over $2 billion. He hasn’t made enough of a difference for it to even affect the rounding of the deficit number. It would remain at $1.1 trillion with the cuts he proposed.
It’s just part of the grand delusion that continues to permeate any discussion about deficit reduction. As a challenger, it’s easy to throw out these sorts of projections, and there’s a place for discussing the wisdom of subsidizing things like public broadcasting and the arts. But let’s not pretend it’s a solution for the deficit problems. If they want to have a better grasp of what we’re up against, all candidates, including sitting presidents, should have to take the Concord Coalition’s Federal Budget Challenge before they hit the campaign trail. Voters deserve more realistic discussions of our serious fiscal problems.