To reduce deficits, both candidates are going to have to make some cuts or raise somebody’s taxes. So, where would they cut or who would pay more in taxes?
Romney’s position is clear: No new taxes. He’s a signee of a pledge to never raise taxes and raised his hand at a Republican primary debate when asked if he would reject a debt reduction proposal with $10 in spending cuts for every $1 in higher revenue.
But he has not come anywhere near outlining where he would find $4 trillion in spending cuts.The largest annual cuts he has promised revolve around cutting back on the federal workforce ($47 billion in lower federal worker pay, for example) among a host of smaller measures, such as privatizing Amtrak ($1.6 billion), cutting arts subsidies ($600 million), and reducing foreign aid ($100 million).
He says he will repeal the president’s health-care reform law, which the CBO estimates will actually add $84 billion to the deficit during the next decade. His largest cuts come from a host of reductions from gauzy concepts such as reducing fraud, waste, and abuse ($60 billion) and allowing states to innovate with federal block-granted funds (over $100 billion).
Obama’s plan, roundly rejected by the GOP, calls for roughly 30 percent of long-term deficit reduction to come from higher taxes and the balance from lower government spending. He aims to achieve $1.5 trillion in higher revenues, largely from more taxes on the wealthy. (See next item.)
The president’s budget claims a ratio of $2.50 of cuts for every $1 in new revenues by counting the already-passed $1 trillion in deficit reduction from the Budget Control Act of 2011 – the deal that allowed the US to raise its debt ceiling in exchange for comparable spending cuts – as part of his reductions. In other words, he doesn't get to his own deficit-reduction targets, even assuming that the BCA is respected by future lawmakers.
Neither candidate wants to lay down too many specific proposals for reforming spending on the 40 percent of the budget spent on Social Security, Medicare, and Medicaid.
