What Revenue Neutrality?
10.11.12 8:45 AM ET
Mitt Romney’s Military Budget Hypocrisy
In the wake of Mitt Romney’s deft first debate there’s been a lot of belated questions about whether his promises make sense in terms of, you know, math.
After all, a core claim of the Romney campaign is this: “Getting our fiscal house in order has become more than just an economic issue; it’s a moral imperative.” As a Bowles-Simpson-style deficit hawk, I appreciate the sentiment about reducing the generational theft of deficits and debt. It’s the policy hypocrisy I can’t stand.
So for the moment, let’s put aside the very reasonable question about whether Mitt can simultaneously cut taxes 20 percent, and keep the cuts revenue-neutral by closing unspecified loopholes, all while progressivity in place. Let’s assume he’s a wizard, as Jon Stewart suggests and move to something even more contradictory and concrete—military spending.
This week, Mitt reiterated one of his most expensive and longstanding political panders—a commitment to increase military spending to 4 percent of GDP—adding at least $2 trillion to federal spending over 10 years.
The audacity of the etch-a-sketch meant that this specific budget-busting promise was so big that it almost went unchallenged—and certainly it hasn’t yet reached the level of mainstream, Main Street debate.
But let’s put it this way—a million dead Big Birds wouldn’t begin to compensate for this new expense. In fact, it single-handedly invalidates every specific cut he has proposed—which essentially consists of social conservative low-hanging fruit like “eliminating Title X Family Planning Funding” ($300 million), reducing foreign aid ($100 million), privatizing Amtrak ($1.6 billion) and reducing “Subsidies For the National Endowments for the Arts And Humanities, The Corporation for Public Broadcasting, And the Legal Services Corporation ($600 Million). And of course, we can’t forget the pricetag placed by the Romney campaign on the not yet fully-implemented Obamacare ($95 billion). You do the math.
Even if you believe Mitt on the magically paid for, completely painless $5 trillion tax cut, adding in this specific commitment to spend more than ever before on our military puts us on the path to further future deficits.
I called Professor John Diamond at Rice University, whose tax study Romney has cited in recent days, to ask him whether the math begins to add up when the promised military spending is included. “If you’re going to increase military spending and you’re going have to revenue-neutral tax cuts, you have to either cut spending or raise taxes somewhere else,” Professor Diamond said. “There aren’t real complicated problems—there are only two choices.”
(Professor Diamond also said he had not looked at the issue of whether Romney’s tax plan would retain progressivity or analyzed the full range of savings from specific deductions, as the campaign hasn’t offered the details to do so—but that’s for another column.)
The libertarian Cato Institute’s Benjamin Friedman expressed more pointed skepticism: “I don’t view it as a serious policy proposal. It seems like more of a talking point. What Obama said in the debate is true—it would add about $2 trillion in spending over a decade,” Friedman said. “It’s totally unclear where he would get the money to do this…[and] Romney is not going to articulate exactly what he would do to get there, because it would almost certainly be wildly unpopular.”
But that’s not all.
“The other thing is that it’s just ridiculous, intellectually. We ought to have a defense budget that’s designed to deal with our enemies who are, in my opinion, weaker than ever—not pegged to an arbitrary percentage of the economy,” Friedman continued. “It’s absurd to say that we should keep growing the defense budget as fast as the economy, in fact at a rate considerably above inflation. What a strange way to make a defense policy.”
The ideological inconsistency also grates on Friedman, for good reason. “To be allegedly skeptical of government spending while being for spending massive amounts on defense—it’s hard for me to get upset about it anymore, because it’s just sort of the daily hypocrisy or ideological inconsistency,” he says. “If you say you don’t think the government can efficiently deliver the mail, it’s odd to say it can deliver democracy to Mesopotamia or Afghanistan.”
As is often the case in this campaign, we’re left wondering whether Mitt Romney really believes his own policy or whether it is just another expedient pander on the path to the presidency.
What we can say for sure is that the math doesn’t begin to add up—which is a particular problem if you’re running as a numbers guy committed to reducing the existential threat of deficits and debt.
Maybe there is some cynical sleight of hand that makes all this impossible math work—like letting the Bush tax cuts expire on December 31st and then making the Romney tax cuts begin from that new higher baseline, while simultaneously saving the country from the largest tax cut in history (cue the conquering hero trumpets).
But it has been surreal to see the allegedly fiscal conservative candidate beat up the Democrat for proposing spending cuts. Romney is running instead as a $2 trillion big government Keynesian when it comes to the military industrial complex while proposing comparatively small but devastating cuts to social programs as a sign of what a tough fiscal disciplinarian he’s going to be. It’s absurd. The open question is whether it will be effective.
So I asked the most heretical question I could imagine asking a scholar at the admirably intellectually consistent Cato Institute: Is it fair to say that at least on this one issue, military spending, that President Obama is more fiscally conservative than Mitt Romney?
“Yeah, sure,” Benjamin Friedman said. “I guess by definition, right? I mean, on this issue at least.”