In the Red

06.19.12

Romney Should Make Runaway Federal Spending a Key Issue in His Campaign

The government’s out-of-control spending is a problem every voter can understand, so why doesn’t candidate Romney capitalize on this issue that’s his for the taking? asks Michael Medved.

Are you willing to spend $2,675 a month to support the federal government? Would you choose to invest $32,100 every year to pay for the services Washington provides for you?

That's the principal question the voters will decide in this election cycle, and the one challenge that could win the White House for Mitt Romney.

Unfortunately, his compulsively cautious campaign hasn’t yet raised the issue with appropriate force and clarity, leaving the current debate on economic issues unfocused and indecisive. The Republican candidate and his advisers should recalibrate their pitch to concentrate on the most obvious and immediate threat to the restoration of prosperity: the hideous specter of runaway federal spending.

The daunting figures cited above aren’t speculative, and they don’t raise the sobering prospect of punishing burdens at some dimly glimpsed moment of the future. The numbers—$2,675 a month that must be paid or borrowed for every household in the nation, the equivalent of $32,100 per year—represent current reality. In June the Treasury Department released figures on federal spending for May that showed the government blowing through $305.3 billion, with more than 40 percent of the total borrowed against our children’s future. What’s more, May hardly stands out as a uniquely costly month: in the first 8 months of fiscal year 2012, the feds have perpetrated average monthly spending of more than $301 billion.

Where do the politicians and the bureaucrats hope to get this money? For the vast majority of U.S. households—nearly 70 percent—a contribution of more than $32,000 a year represents the majority of their annual income. How many Americans would choose to contribute more than half of what they earn to Washington, D.C., all the while carrying additional tax burdens to sustain state and local governments?

The question becomes even more painful in light of the current distribution of the income-tax burden. With nearly half of all households paying nothing in federal income tax, that makes the burden for taxpaying families more like $5,000 a month, or $60,000 a year—well above the mean figure for total income of American households. In other words, if policymakers distributed the cost of spending equally among all taxpayers, many families would need to send all their money to Washington, with nothing left for food, shelter, or basic survival.

Liberals may insist that such calculations mean nothing because of the progressive tilt of the tax system. They observe that we don’t distribute financial burdens evenly on all households because the rich can and should pay more. But even if we followed the promptings of the president and raised taxes on the most prosperous Americans, the figures still don't add up to a sustainable cost. Leaving current taxes where they are for “the 99 percent,” the IRS could impose a tax rate of 100 percent—confiscating every penny earned by the top 1 percent (those with adjusted gross Income above $344,000)—and it still wouldn’t come close to covering the cost of keeping the federal behemoth afloat.

At current spending levels, in fact, it’s virtually impossible to devise a plausible tax rate that could provide meaningful, necessary deficit reduction, let alone cover the cost of running the whole federal establishment. It is not credible that any Congress would expect those who earn more than $350,000 to pay all of their income to the government, especially if such a confiscatory policy only meant ever-rising levels of accumulated debt.

Why hasn’t Mitt Romney focused relentlessly on the spending issue–the one facet of the economic debate where he can most easily win the argument against President Obama?

That’s why the Republicans need to move the debate away from arguments as to whether to tax more and to begin to focus the conversation on how to spend less. Unless we want to keep throwing away money at the level of $32,100 a year per household, we need dramatic reductions in federal spending. The question therefore remains fair, inescapable, and devastating: how many would stand ready to cough up $2,675 this month to fund federal operations, and who thinks it's fair or sane to expect every American household to pay or borrow at that level?

Very few of our fellow citizens would answer yes, which makes President Obama's call to spend even more for various “investments” so outrageous and irresponsible. No matter how much favored constituencies may love solar panels, bullet trains, and more subsidies for student loans, federal authorities simply can’t afford such new initiatives.  

Despite the president’s increasingly preposterous pose as a tight-fisted guardian of the public purse, spending levels undeniably exploded as soon as his Democratic allies seized control of Congress in 2007. While the last all-Republican budget of the Bush administration (approved before the Pelosi-Reid takeover) kept federal spending at its postwar average of 20 percent of GDP, the expenditures soared under liberal leadership and have remained dangerously high throughout the Obama presidency, in 2012 amounting to more than 24 percent of GDP. Do Americans feel that the government operates so much more efficiently and compassionately today that it justifies taking an extra four cents out of every single dollar that we earn? Have we felt the improvement in federal services generated by the net increase of 200,000 civilian workers hired by the feds since Obama's inauguration?

These questions should work better in this electoral battle than Ronald Reagan's familiar formulation, "Are you better off than you were four years ago?" Many Americans could answer yes to the old question, and many more would feel unsure. But no one can feel undecided on the mad surge in federal spending, since it’s provided no demonstrable improvement in the functions of government.

Why, then, hasn’t Mitt Romney focused relentlessly on the spending issue—the one facet of the economic debate where he can most easily win the argument against President Obama?

In part, the candidate and his advisers feel an understandable reluctance to raise needless controversies by getting too specific about the items in the budget they would cut. When Romney suggested at a Florida fundraiser that he might consider eliminating several federal departments, including the Department of Education and the Department of Housing and Urban Development that his father once headed, the Democrats pounced to accuse the candidate of irresponsible radicalism. The Romney camp feels far more comfortable speaking generally about a statutory cap on spending at 20 percent of GDP, leaving the particulars about which items to slash for ferocious debates during his first year as president.

But the Romney team makes a major mistake if they believe that the president’s present problems mean that they can cruise to victory in November simply by presenting the candidate as the “un-Obama.” They must also persuade the public that he’s the “un-Bush.”

The most effective line for the Democrats involves their charge that Romney wants to take us back to the same disastrous polices of George W. Bush that failed conspicuously in the last administration. And the best place for Governor Romney to draw a bright-line distinction between his plans and values and those of President Bush involves the all-important issue of spending. Candidate Bush, running at a time of federal surplus, frankly promised to increase federal expenditures—particularly for education—and he more than kept his promise. It’s true that the Bush spending record got infinitely worse after the Pelosi-crats came to town in 2007, but the administration had already shifted from surplus to deficit before the Democratic majorities arrived. By focusing on a rigorous, unequivocal commitment to spending reductions Governor Romney could also emphasize the crucial contrasts between his approach and the now widely unpopular “compassionate conservatism” of the 43rd president.

Though polls show jobs as the electorate's principal concern, there's no way that voters can cast a direct vote for more employment opportunities. All politicians promise more jobs yet few Americans feel confident on their dueling visions on how to fulfill those pledges. But while the mysteries of job creation seem hazy,  most of us maintain an instinctive fear of bankruptcy, and dramatic developments across the Atlantic highlight the dire consequences of spending and borrowing at unmanageable levels.

If Romney can speak passionately and personally to the American people about the cost of government for each family, through raiding their present piggy banks or adding debt for generations yet unborn, the issue will become real.

And it’s safe to assume that when offered an unmistakable choice, only a minority of voters would willingly cough-up another $2,675 dollars next month to sustain Washington’s creaky operations at their ongoing level of free-spending disfunctionality.