What Mitt Romney's 'poor' gaffe really means

Mitt Romney got knocked about a bit today for saying that he is “not concerned about the very poor.”  Not quite “let them eat cake” but sounds bad, right?

Actually, what he seems to have meant, if you look at the context, is that he believes the least-well-off are amply provided for by the safety net.  He doesn’t worry about the rich, either—“they’re doing just fine.”

My first thought was: hey, I’m glad he recognizes the existence of and need for the safety net.  My second thought was…um…he’s gonna shred it!

Though Gov Romney recognized that “…we have food stamps, we have Medicaid, we have housing vouchers…” he neglected to make the following four points:

1) his budget slashes, and I mean SLASHES, domestic spending outside of defense.

2) he’s endorsed Rep Paul Ryan’s budget (now the House Republican Budget) which gets two-thirds of its $4.5 trillion in cuts from low-income programs (and uses the cuts to pay for tax cuts for the wealthy).

3) the Gov’s own tax plan actually raises taxes on those in the bottom fifth of the income scale (by $160 per year; by getting rid of a refundable credit for poor kids and cutting the EITC relative to current policy)—while cutting taxes for the top 0.1% of households (avg inc: $8.3 million) by about $460K/year.

4) he’s said he wants to block grant these low income safety net programs–i.e., instead of the federal program, states run it based on an annual grant, a fixed amount that does not go up or down based on need–and that’s a great way to rip some big holes in the safety net.

On #1 and #2, see here.  Remember those Ryan cuts I warned about above?  Well, according to my CBPP colleagues Van de Water and Kogan:

Governor Romney’s budget proposals would require far deeper cuts in nondefense programs than the House-passed budget resolution authored by Budget Committee Chairman Paul Ryan: $94 billion to $219 billion deeper in 2016 and $303 billion to $819 billion deeper in 2021.”

Medicaid and the Children’s Health Insurance Program (CHIP) would face cumulative cuts of $946 billion through 2021. Repealing the coverage expansions of the 2010 health reform legislation, as Governor Romney has proposed, would achieve more than the necessary savings.  But it would leave 34 million people uninsured who would have gained coverage under health reform.

Cuts in the Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamp Program) would throw 10 million low-income people off the benefit rolls, cut benefits by thousands of dollars a year, or some combination of the two.

On #4, if you want to see what block granting does to safety net programs, exhibit one is TANF.  My colleagues Donna Pavetti and Liz Schott point out that the program has become much less elastic to the business cycle.  In fact, its block grant has been frozen for 15 years!

The figure compares its responsiveness in the Great Recession to that of SNAP (formerly ‘food stamps’), a national program (not a block grant) which remains quite countercyclical.  But if Mitt block grants it, that will change.

It’s one thing—and it’s a good thing—to recognize the importance of the safety net in the economic lives of the poorest among us.  But it’s quite another indeed to go after it the way Gov Romney does in his budget endorsements and proposals.