For years, polls have shown that a majority of the country ranks rising federal debt and deficits amongst its top political concerns. Indeed, there’s some indication that such concerns are on the rise: A Pew poll released in January of this year, for example, reported that 69 percent of the public considered the budget deficit a priority, up 16 percent from the previous year.
Over the course of this year’s primary, all of the GOP candidates have paid lip service to the idea of tackling the debt. But according to a new report by the Committee for a Responsible Federal Budget, only one candidate’s overall combination of tax reforms and spending cuts would actually reduce the total federal debt over the next decade. That candidate is Ron Paul.
CRFB’s estimates indicate that Ron Paul’s policies would reduce the debt by about $2.2 trillion by 2021 under an intermediate-debt scenario, which interprets the candidate’s policies in a way that assumes neither extremely aggressive nor particularly lax policy and implementation choices. Under the same scenario, Rick Santorum’s proposed policies would lift total federal debt by $4.5 trillion. Newt Gingrich’s plans, taken all together, would hike federal debt by about $7 trillion.
Mitt Romney’s headline numbers are better than those posted by Gingrich and Santorum, but only in the sense that they are less bad: CRFB estimates that the former governor's policies would lift the debt by $250 billion by 2021 relative what it would otherwise be.
But Romney’s proposals are missing the sort of detail necessary to really know how they might work. His campaign has suggested it will close a number tax loopholes in order to help fund tax reform, but hasn't said which ones. And although he’s named targets for domestic and defense spending reductions, he hasn’t said exactly what he’ll cut in order to achieve those reductions. (As I’ve noted before, we have a better idea about how Mitt Romney will not cut federal spending than we do about how he would.)
How is it that Romney, Santorum, and Gingrich would end up increasing the federal debt? It’s pretty simple, really: They would cut taxes, but wouldn’t cut spending to match. Santorum’s policies would reduce spending by a little more than $2 trillion, but would cut taxes by $6 trillion. Gingrich would cut slightly more in spending—about $2.7 trillion—but would cut taxes by $7 trillion and actually add $1.6 trillion in spending to overhaul Social Security, among other policy changes. Romney’s vague plans score better, but wouldn’t reduce the debt, and would probably push it slightly higher than it otherwise would have been.
Ron Paul, on the other hand, would cut taxes, but he’d cut spending even more. His tax cuts would reduce the tax burden by $5.2 trillion; meanwhile, he would reduce spending by $7.2 trillion.
(These numbers are produced under what the report’s authors call a “realistic baseline,” which includes policies that are not currently law but are expected to eventually pass, like the extension of the Bush tax cuts, are included.)
Overall, it’s simple enough. Everyone likes tax cuts, but big tax cuts paired with far smaller spending cuts aren’t likely to reduce the federal debt. Spend more than you take in during any given year (as we currently are, to the tune of a trillion bucks or so), and you have a deficit. Those deficits pile up over the years, and give us the federal debt. This shouldn’t be too hard to grasp, but only Ron Paul seems to have figured it out.
The knock on the candidate comparison is that Ron Paul’s plans aren’t realistic. But letting the debt continue on its current unsustainable trajectory—or rise by trillions, as Santorum and Newt likely would—isn’t realistic either. At a minimum, Paul’s plans show the kind of policy changes that will be necessary in order to both cut taxes and take a big chunk out of the federal debt.
There are two major takeaways here: First, while candidates understandably like to talk about tax cuts, when it comes to the federal debt, it’s the spending cuts that matter. Second, the remaining trio of conventional GOP presidential wannabes—Romney, Santorum, and Gingrich—aren’t serious about cutting spending, or about truly improving the nation's long-term fiscal path. They’re invested in the rhetoric of debt reduction, but not the policies that would make it happen.