Report: Debt will swell under the Tax plans of Every GOP Hopeful but Ron Paul!

Tink123 2012/02/23 23:02:45

Report: Debt will swell under top GOP hopefuls’ tax plans

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Updated: Thursday, February 23, 4:01 AM

The national debt is likely to balloon under tax policies championed
by three of the four major Republican candidates for president,
according to an independent analysis of tax and spending proposals so
far offered by the candidates.

The lone exception is Texas Rep. Ron Paul, who would pair a big
reduction in tax rates with even bigger cuts in government services,
slicing about $2 trillion from future borrowing.

According to the report — set for release Thursday by U.S. Budget
Watch, a project of the bipartisan Committee for a Responsible Federal
Budget — former Pennsylvania senator Rick Santorum and former House
speaker Newt Gingrich would do the most damage to the nation’s finances,
offering tax and spending policies likely to require trillions of
dollars in fresh borrowing.

Both men have proposed to sharply cut taxes but
have not identified spending cuts sufficient to make up for the lost
cash, the report said. By 2021, the debt would rise by about $4.5
trillion under Santorum’s policies and by about $7 trillion under those
advocated by Gingrich, pushing the portion of the debt held by outside
investors to well over 100 percent of the nation’s economy.

red ink would gush less heavily under former Massachusetts governor Mitt
Romney, the report said — at least under earlier Romney proposals that
paired $1.35 trillion in tax cuts with $1.2 trillion in spending
reductions and would leave the debt rising on a trajectory that closely
tracks current policies.

But that probably changed Wednesday, when
Romney tacked to the right and proposed to cut federal income tax rates
by an additional 20 percent for all earners — an idea that could easily
slash federal revenues by another $3.5 trillion over the next decade,
said Edward Kleinbard, a University of Southern California law professor
and former chief tax analyst for Congress.

In a late-night
addendum Wednesday, analysts for U.S. Budget Watch set a slightly lower
price for the new tax provisions, suggesting that Romney’s entire budget
framework would add about $2.6 trillion to the debt by 2021.

Paul emerged as a fiscal conservative in the report. His policies would
cut tax revenues by more than $5 trillion over the next decade, the
report said, but the revenue loss would be offset by more than $7
trillion in spending cuts, including deep reductions in defense and
federal health programs.

The report marks the first independent
attempt to gauge the overall impact of policies proposed by the GOP
candidates on the nation’s $15.4 trillion debt.

“As we enter the
thick of the campaign season, no one can ignore the debt issue,” said
Maya MacGuineas, president of the Committee for a Responsible Federal
Budget, which works actively to support debt-reduction efforts in
Washington. “This report is designed to inform the public on the fiscal
policies put forward by each of the Republican candidates and stimulate
debate on this crucial topic.”

The report does not include an
analysis of President Obama’s latest budget request, which claims to
reduce borrowing by $3 trillion over the next decade. The group plans to
do its own analysis of Obama’s request in a future report. The group
said it also plans to update the GOP proposals as they evolve and add

The report does not seek to offer support to any
candidate, and its authors have gone to great lengths to give everyone
the benefit of the doubt. For example, the report offers three scenarios
for each candidate: a “low-debt scenario” based on the most generous
assumptions about vague changes in policy and a “high-debt scenario”
that gives credit only for specific policy proposals.

The numbers
cited above are taken from the report’s “intermediate-debt scenario,”
which “gives credit for non-specified changes to certain part of the
budget (for example, reducing non-defense discretionary spending by a
percentage)” even if the candidate has not identified specific policy


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