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Ruth (Marcus): Romney Reforms More Ruthless Than (Even) Ryan’s

January 18th, 2012 . by economistmom

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The Washington Post’s Ruth Marcus points out that if Mitt Romney really cares about the poor, he has a funny way of showing it–in this case, regarding his ideas for fiscal policy reforms:

“I’m concerned about the poor in this country,” Mitt Romney said the other day. “We have to make sure the safety net is strong and able to help those who can’t help themselves.”

I perked up at those words, because they were something of a departure from his usual stump speech and because they happened to come on a day when I had written about the dire implications of Romney’s proposals for the social safety net.

I don’t question his sincerity. The problem: This fine sentiment doesn’t square with his actual policies…

The impact of Romney’s approach on the safety net would go far beyond Medicaid. The brutal arithmetic of his stated plan to cap spending at 20 percent of gross domestic product — while, unlike Ryan, increasing defense funding — is that safety-net programs would have to be chopped significantly beyond where even Ryan would take them.

Romney’s tax plan would exacerbate the unfairness. He would continue the Bush tax cuts for the wealthiest Americans and provide extra breaks that would primarily help the rich…

At the same time, Romney would do away with recent increases in the child tax credit and the earned-income tax credit — provisions that help low-income families…

This is one way to make the necessary tough choices regarding the federal budget:  if we choose to keep taxes low and defense spending high, the rest of the budget has to give.  There’s a lot to be said for a politician being clear about his priorities and spelling out the policies consistent with those priorities.  But as Ruth points out, the consequences must be spelled out, too:  you can’t cut spending on the poor that dramatically and expect that the poor will be better off.  To do so is either the result of delusional beliefs about extreme “trickle down” economics, or a grossly exaggerated view of how much truly “wasteful” government spending now exists–unless one’s definition of “waste” is simply “that which does not benefit me personally.”

7 Responses to “Ruth (Marcus): Romney Reforms More Ruthless Than (Even) Ryan’s”

  1. comment number 1 by: Patrick R. Sullivan

    ‘…you can’t cut spending on the poor that dramatically and expect that the poor will be better off.’

    Are Medicare and Social Security ’spending on the poor’?

  2. comment number 2 by: Vivian Darkbloom

    Economist Mom, I think you are distorting what Romney said. It’s a good thing that you linked to the Marcus article or the sense of what Romney really did say would not have been retrievable:

    “Well, what we don’t need is to have a federal government saying we’re going to solve all the problems of poverty across the entire country, because what it means to be poor in Massachusetts is different than Montana and Mississippi and other places in the country,” Romney said.

    “And that’s why these programs, all these federal programs that are bundled to help people and make sure we have a safety net, need to be brought together and sent back to the states. And let states that are closest to the needs of their own people craft the programs that are able to deal with the needs of those folks.”

    Now, that indeed sounds to me that he wants to reduce *federal* spending on particular programs. It also sounds to me that he is saying that spending on certain programs, and the administration that goes along with it, would be better done at the state level.

    Is this saying the poor should be pushed off deck as you seem to suggest? Or is it a call for greater federalism where the responsibility for some of these programs are transferred to the states? If this is done in a coordinated fashion, I think a very good case can be made for less central control. It is indeed possible that the poor (and everyone else) would be better off as a result. Romney’s tenure as Mass governor does not suggest to me that he is oblivious or insensitive to the needs of the poor, or that the things that can be done for them at the state level should be ignored.

    Reasonable people can disagree as to what Washington should be responsible for and what the states should be responsible for. However, I don’t think your very selective parsing of what he said was reasonable at all.

    If I were to accept your logic, then I guess any power grab by the federal government would always be irreversible. History has shown that to generally be true; but is that a path that we want to continue?

  3. comment number 3 by: AMTbuff

    Romney is talking about means testing. Limiting the safety net to the most needy and excluding the middle class WILL make the poor better off.

    Attempting to maintain benefits for the non-needy WILL make the poor worse off, because it will lead to a fiscal crash.

    Progressives have such difficulty realizing that protecting government workers and middle class recipients of benefits is separable from helping the poor. The former may attempt to hold the poor hostage, but it’s time to push back. Those with the ability to manage on their own must stop milking the taxpayers.

    As usual, the debate is dominated by politics. A fiscal crash can only be avoided by means testing the middle class out of the benefits they were promised. The party that made those promises is resisting, fearing loss of credibility.

    A fiscal crash is much easier to blame on the other party than benefit cuts agreed to in a negotiation. The welfare of the poor doesn’t matter to politicians. Nor does the fate of the country. Only votes matter.

  4. comment number 4 by: SteveinCH

    It is shocking how much of government transfer payments go to the middle class by income and the rich by wealth.

    The poor cost us relatively little as opposed to the rest.

  5. comment number 5 by: Shadowfax

    Once we realize the Republican Party primarily exists to help the wealthy and corporations keep more of their own money, the rest of their agenda makes sense.

  6. comment number 6 by: Patrick R. Sullivan

    Well, Shadowfax, both parties are to blame for this boondoggle for people who can afford a 3/4 million dollar house;

    http://www.aei.org/outlook/economics/financial-services/housing-finance/bet-the-house-why-the-fha-is-going-for-broke/

    ————-quote———-
    …when measured against the accounting system used by private mortgage insurers, the FHA is deeply insolvent, with a capital shortfall of tens of billions of dollars. If it were a private firm, state regulators would immediately shut it down. Even using its own rosy numbers puts the FHA’s leverage at 840 to 1, a far more scandalous ratio than even Fannie Mae and Freddie Mac. As shown by Fannie and Freddie as recently as 2008 and the slow-motion collapse of the savings and loans (S&Ls) in the 1980s, if government-backed entities are allowed to continue operating when they are insolvent, their losses will only compound. Indeed, the FHA has almost tripled its insurance in force in only three years, in part to cover its losses. And Congress made matters worse last fall when it raised the FHA’s conforming loan limit to $729,750. That pleased the powerful National Association of Realtors, but it simply poured fuel on the fire. Before the agency’s losses skyrocket, triggering a massive taxpayer bailout that deepens our nation’s debt, Congress should reverse that mistake and enact reforms to pull the FHA back from the brink.
    ————endquote———–

    Anyone who cares about the poor should be worried about this, right?

  7. comment number 7 by: STDog

    Shadowfax, you are correct. The Republican party generally wants everyone to keep the money they earned. That includes not only the “wealthy” and corporatioins, bet eveyone, at all income levels.