In an interview on “Meet the Press”, Mitt Romney said Republicans made a mistake by helping pass the Budget Control Act. The legislation gave Congress a set amount of time to come up with over $1 trillion in deficit reduction, or automatic cuts would kick in. The automatic cuts contained deep cuts to the military. The idea behind the automatic cuts was that they were so bad, Congress would be highly motivated to come to an agreement. A “super committee” of Republicans and Democrats was formed to achieve this goal. The super committee failed, and the cuts (called sequestration) are set to kick in at the beginning of next year.
Romney said he disagreed with both the White House for proposing it, and with Republicans for agreeing to it. As of late, Romney has been talking a lot about the military and the nation’s defense. He was hammered for not once mentioning Afghanistan in his acceptance speech at the Republican National Convention, and he seems to be trying to make amends. Governor Romney has stated that he intends to keep defense spending at its current level.
Romney’s stance on military spending may not jive well with his overall budget plan. The former Massachusetts governor wants to lower the deficit, but that task will be extremely hard to do without touching defense spending. The task is mad nearly impossible when you factor in Romney’s plan to cut taxes across the board by 20%. The details of the Republican candidate’s plan have yet to be released, and probably won’t until after the election, if he wins the presidency.
The Department of Defense had a budget of over $700 billion in the 2012 budget. That number includes “Overseas Contingency Operations”. Defense spending accounts for about 20% of the federal budget, which in 2012 was $3.7 trillion. Federal revenue in 2012 was around $2.4 trillion, leaving a deficit around $1.3 trillion. Anyone serious about tackling the deficit issue will have to work on defense spending.
Outside experts have made calculations based on Romney’s proposals, and even using the generous growth models he expects, his plan falls short. The only way to reconcile the numbers is by cutting popular deductions that middle income earners use. Cutting these loopholes would result in middle class taxes goes up by about $2,000 a year. Romney has denied these claims, but he has yet to provide sufficient data to prove how his plan will work otherwise.
Romney’s plan gets even more complicated when you factor in his claim that he will not change benefits to current Medicare recipients. Medicare is another large portion of the budget, costing around $500 billion in 2012. If Romney does not touch those benefits, and keeps defense spending at current levels, he is already committed to over $1 trillion in spending.
Unfortunately for Governor Romney, we have already seen this type of policy at work. George W. Bush made similar promises, and his term was littered with record setting deficits. The government can not do all of the things Romney wants, and then have him cut taxes at the same time. There are not enough savings outside of the big budget items to balance the numbers. If Governor Romney wants to cut taxes 20% across the board, he will have to cut defense spending or Medicare. Otherwise, he will run deficits much like the last Republican who occupied the White House.