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    The Podium

    Fuzzy math from Romney and Ryan

    Common sense suggests that Governor Romney can’t reduce taxes and cut the deficit while raising spending and maintaining important government programs. By laying out 10-year revenue and spending forecasts in the House budget last spring, Romney’s runningmate, Budget Chairman Ryan, has given us the tools to check out Romney’s arithmetic.

    Using Ryan’s own data, we can see just how radical – and impossible – the Romney budget proposals really are. Romney proposes to limit non-defense spending to 16 percent of Gross Domestic Product. Even after the big cuts Ryan proposes in programs for the needy, he still expects to spend 15.8 percent of GDP in 2020 (the last year of a 2nd Romney term) for Social Security, Medicare and Medicaid, food stamps and unemployment insurance, interest on the debt, and aid to veterans. The implication of Ryan’s figures, then, is that Romney will have no money at all for everything else the government does — including education, transportation, the FBI, border patrols, and environmental and financial regulation.

    In recent years, the broad part of the government that includes Medicare, Medicaid, Social Security, and Food Stamps has grown faster than GDP. Ryan proposes to reverse these increases with major cuts to Medicaid, food stamps, and welfare — cuts so severe that the Catholic bishops have criticized his budget as being contrary to Catholic values.


    Even so, there’d be nothing left for the areas of government investment critical to future growth — basic research, building roads and schools, improving K12 education, and helping more young people go to college. One key lesson here is how small the programs most of us think of as “the government” — like education, medical research, and the FBI — really are. Last year all of those programs combined represented only 2.7 percent of GDP (and only 11.5 percent of all federal spending).

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    Worse, these figures don’t account for Romney’s pledge to reverse the $716 trillion in Obama (and Ryan) reduction in payments to Medicare providers. And they assume no net cost for the Romney tax cuts, even though eliminating all deductions for taxpayers over $100,000 would offset only a third of the revenue loss.

    Romney has said he has no plans to cut education spending. But the math leaves him no choice. He would need not just to cut education spending, but eliminate it altogether. To do otherwise would require that he give up on deficit reduction and revise his other plans — for defense, tax cuts, and Medicare.

    What does this mean for Massachusetts? In 2009, our universities and hospitals had $13 billion of federally funded research. We received over a billion dollars in aid to education, $200 million in Pell grants, and $858 million in highway and mass transit aid. How could business travelers get in and out of the state with no Amtrak and without the FAA to keep airplanes safe in the sky?

    Because the current deficit is so large, and because the Ryan cuts to social welfare programs are so harsh, there’s simply no responsible path to deficit reduction without both an increase in taxes and major cuts in spending. That’s what President Obama tried to negotiate with Speaker Boehner last year. And its what 80 leaders of major American companies called for last week. David Cote, the CEO of Honeywell — a Republican — summed it up: “To say that you can solve this without increases in taxes is ludicrous.”

    Edward Moscovitch is president of Cape Ann Economics. Previously, he was a vice- president at the economic forecasting company Data Resources, Inc., and served as Massachusetts state budget director under governor Francis Sargent.