Republican Mitt Romney’s proposal to cap federal spending at 20 percent of the economy would require a budget cut of $250 billion in his first year and $5 trillion over 10 years for everything but defense, “a reckless approach to budgeting that will take a heavy toll on middle-class security,” President Obama’s campaign argues in a policy memo Friday.
The critique was released in advance of Romney’s appearance Friday afternoon for a speech on fiscal policy to a convention of Americans for Prosperity in Washington. On Thursday, Romney previewed the spending cap element of his plan, and he is expected to elaborate on it at the tea-party-related AFP’s meeting.
“Deficits matter,” Romney said in Exeter, N.H. Thursday night.
Federal investments in education would be cut 25 percent, spending on roads bridges and other infrastructure by one-third, and “clean energy” programs would be slashed 70 percent under the cap, the White House estimates. (It made its calculations based on the similar spending plan released earlier this year by House Budget Committee Chairman Paul Ryan (R.,Wis.).
Romney has not spelled out his own approach to Medicare, but the Ryan plan would replace the health-care system for senior citizens with vouchers allowing subscribers to buy private insurance policies. That plan would increase out-of-pocket expenses for seniors to $6,000 by 2022, the congressional Joint Economic Committee staff calculates.
In addition the well-off would benefit disproportionately from Romney’s previously expressed desire to cut corporate taxes and eliminate the federal inheritance tax, the memo argued. Though Romney would eliminate taxes on dividends and capital gains only for families earning less than $200,000 a year, that change would net middle-income people only about $54 a year, compared to the $1,500 promised by the Obama administration’s proposed continuation of a payroll tax cut.