Romney's Tax Plan Isn't Concerned About The Very Poor
Feb. 3 (Bloomberg) — By now it seems everyone has chewed over Mitt Romney’s gaffe about poor people and spit out the ideologically determined opinion. Speaking this week to CNN anchor Soledad O’Brien after his victory in the Florida Republican primary, Romney blurted out, “I’m not concerned about the very poor.”
For Democratic partisans, the video, an early valentine, speaks for itself. But even conservatives criticized Romney for ham-handedness or for failing to articulate the proper vision of upward mobility. The news media, facing a dreaded lull in the presidential contest, naturally piled on.
The harsh reaction was unfair, but in a particularly galling fashion. Pressed to clarify his remark, Romney said, “My focus is on middle-income Americans,” and added, “These are the people who’ve been most badly hurt during the Obama years.”
However awkwardly expressed, Romney’s meaning seemed plain for those willing to hear him out: He was pitching his lot with the middle class, but meant no harm to the poor. In fact, in the interview Romney made a commitment: “I’m not concerned about the very poor that have a safety net, but if it has holes in it, I will repair them.” You can read the transcripts of all 19 Republican presidential debates and not find a more compelling promise to the hard-pressed.
The real problem with Romney’s remarks is that they bear little resemblance to his comparatively uncontroversial economic plan. According to the Tax Policy Center, a joint project of the Brookings Institution and the Urban Institute, “Believe in America,” Romney’s economic blueprint, would impose fresh burdens on the poor, cutting anti-poverty programs while simultaneously depriving lawmakers of the money to repair the holes. As for the middle class, it is hard to argue that it is a primary “focus,” at least if you follow the money in the candidate’s plan.
A few examples. Romney would end tax credits for higher education, the expansion of the Earned Income Tax Credit and other provisions enacted in 2009 to counter the recession. While taxes for many poor people would rise, taxes on the middle class would generally decline somewhat and taxes on the wealthiest would decline substantially. Romney would repeal health insurance for the working poor, repeal the estate tax and permanently extend the Bush tax cuts. The Tax Policy Center calculates that in 2015 Romney’s plan would generate an average break of $865,637 to the top 0.1 percent of taxpayers.
Romney’s plan would also put government on less solid footing. Compared with current federal policy, Romney’s plan would add an additional $180 billion to the federal deficit in 2015. Calculated by a more exacting standard — current law — his policies would increase the deficit by $600 billion. Nothing in the plan suggests that the middle class would be exempt from interest and principal payments on the extra debt accrued.
In the foreword to Romney’s “Believe in America,” economist R. Glenn Hubbard, who served as chairman of the Council of Economic Advisers under President George W. Bush, notes that “U.S. GDP growth has averaged 3.3 percent over the past 50 years. But in the 2002-2007 period, before the crisis’s eye of the storm hit the financial system and the economy, that growth averaged just 2.6 percent.”
Why this forthright assessment of the record of the Bush administration appears in a Republican campaign document is a mystery. For most of the half century of higher growth that Hubbard cites, U.S. tax rates were sharply more progressive than they have been since the Bush tax cuts took effect after 2001.
Instead of being pummeled for his inartful statements, Romney should be asked to spell out how his economic plan affects the poor, middle class and wealthy alike. Having a political career reduced to caricature is unfair to any candidate; not pressing candidates to explain how their rhetoric meshes with their proposals is unfair to us all.