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The Romney Budget Proposals
During his campaign, Governor Romney has made four proposals that would significantly affect the overall level of federal spending, taxes, and the deficit:
Cap total spending: "Reduce federal spending to 20 percent of GDP by the end of my first term" and "cap it at that level." [1]
Increase defense spending: "Set a core defense spending floor of 4 percent of GDP."[2]
Cut taxes: Permanently extend the 2001-2003 tax cuts, eliminate taxation of the investment income of most individuals, reduce the corporate income tax, eliminate the estate tax, and repeal the taxes enacted in the 2010 health reform legislation.[3]
Balance the budget: Put the federal government "on a path to a balanced budget."[4]
This paper examines the combined effect of these proposals, since they interact, to determine the amount of spending that would be available for mandatory and discretionary nondefense programs.
Taking only the first three proposals into consideration, the amount available for nondefense programs would equal 20 percent of GDP minus the 4 percent of GDP allocated to national defense minus the amount required to pay interest on the debt.
If the budget also had to be balanced, as the fourth proposal states, there would be even less room for nondefense programs, since total spending could not exceed total revenue, and the amount of tax revenue under the Romney proposals would be well below 20 percent of GDP. In that case, nondefense spending would be limited to the amount of tax revenues (about 17 percent of GDP under the Romney plan, based on estimates prepared by the Urban Institute-Brookings Tax Policy Center), minus 4 percent of GDP for defense, minus interest costs.
Romney Budget Proposals Would Require Massive Cuts in Medicare, Medicaid, and Other Nondefense Spending — Center on Budget and Policy Priorities
That is a start