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Right Turn
Posted at 01:28 PM ET, 11/04/2011

Romney: Bold on spending cuts and entitlement reform

I’m tempted to say that Mitt Romney has found his inner Paul Ryan. In today’s speech before Americans for Prosperity and in the accompanying documentation he lays out, it is fair to say he’s done something extraordinarily out of character — he’s gone bold. The spending and entitlement plan Romney presents embodies a great many of the ideas that Ryan, chairman of the House Budget Committee, has laid out in his original “Roadmap for America’s Future” (on Social Security) and in his 2012 budget.

The basics, as provided by the Romney campaign, are as follows: Cap federal spending at 20 percent of gross domestic product by the end of his first term; cut “approximately $500 billion per year in 2016 assuming robust economic recovery with 4% annual growth, and reversal of irresponsible Obama-era defense cuts”; repeal Obamacare; and either privatize, send to the states or eliminate a raft of programs including:

Privatize Amtrak — Savings: $1.6 billion. Despite the requirement that Amtrak operate on a for-profit basis, it continues to receive about $1.6 billion in taxpayer funds each year. Forty-one of Amtrak’s 44 routes lost money in 2008 with losses ranging from $5 to $462 per passenger.
Reduce Subsidies for the National Endowments for the Arts and Humanities, the Corporation for Public Broadcasting and the Legal Services Corp. — Savings: $600 million. The endowments and the CPB provide grants to supplement other sources of funding. The LSC funds services mostly duplicative of those already offered by states, localities, bar associations and private organizations.
Eliminate Title X Family Planning Funding — Savings: $300 million. Title X subsidizes family planning programs that benefit abortion groups like Planned Parenthood.
Reduce Foreign Aid — Savings: $100 million. Stop borrowing money from countries that oppose America’s interests in order to give it back to them in the form of foreign aid. . . . .
Medicaid spending should be capped and increased each year by the consumer price index + 1%. Labor Department retraining spending should be capped and will increase in future years. These funds should then be given to the states to spend on their own residents. States will be free from Washington micromanagement, allowing them to develop innovative approaches that improve quality and reduce cost. . . .
Reduce Waste and Fraud — Savings: $60 billion. The federal government made $125 billion in improper payments last year. Cutting that amount in half through stricter enforcement and harsher penalties yields returns many times over on the investment.
Align Federal Employee Compensation With the Private Sector — Savings: $47 billion. Federal compensation exceeds private-sector levels by as much as 30 to 40 percent when benefits are taken into account. This must be corrected.
Repeal The Davis-Bacon Act — Savings: $11 billion. Davis-Bacon forces the government to pay above-market wages, insulating labor unions from competition and driving up project costs by approximately 10 percent.
Reduce the Federal Workforce by 10% via Attrition — Savings: $4 billion. Despite widespread layoffs in the private sector, President Obama has continued to grow the federal payrolls. The federal workforce can be reduced by 10 percent through a “1-for-2” system of attrition, thereby reducing the number of federal employees while allowing the introduction of new talent into the federal service.
Consolidate agencies and streamline processes to cut costs and improve results in everything from approving energy-related permits to worker retraining to trade negotiation.

In addition, and most eye-popping, are his proposals for entitlement reform. Along with block-granting Medicaid and other programs for the poor Romney, proposes:

Social Security: No one at or near the retirement age will see any changes, and tax hikes cannot be on the table. Instead, Social Security can be placed on a sustainable trajectory with common-sense reforms:
Gradually raise the retirement age to reflect increases in longevity
Slow the growth in benefits for higher-income retirees
Medicare: Medicare should not change for anyone in the program or soon to be in it. Nor should tax hikes be part of the solution. Reforms must honor commitments to our current seniors while giving the next generation a revitalized program that offers the freedom to choose what their coverage under Medicare should look like:
• Give future seniors a choice between traditional Medicare and many other health-care plans offering at least the same benefits.
•Help seniors pay for the option they choose, with a level of support that ensures all can obtain the coverage they need; provide those with lower incomes with more generous assistance.
•Allow beneficiaries to keep the savings from less expensive options or choose to pay more for costlier plans.
•These reforms will encourage insurers to lower costs and compete on the quality of their offerings.
•Gradually raise the retirement age to reflect increases in longevity.

In a briefing for reporters, Romney advisers told me that as Romney has spelled out before this will not entail cuts to defense. Romney intends to pursue a “restoration of defense spending.” Conservative hawks should be relieved he has not embraced the isolationist tendencies on the right.

The big news here is on entitlements. No longer is Romney hiding behind generalities. He’s staked his flag in the ground on Social Security and tweaked the Ryan plan with an approach that defuses some of the political toxicity. By giving patients a premium support (a defined contribution), his plan allows them to stay within the Medicare plan. As his adviser explained, because the amount of the premium support is fixed government costs are capped. Medicare will compete with private plans. If a senior selects a cheaper plan, he can pocket the difference. The Romney team stressed that the premium support would be “generous” but the amount of this support and other details have yet to be worked out.

Conservatives, including Right Turn, have groused that Romney has played it safe and been lacking in specifics. He’s now stepped up to the plate and should get credit for it. Whether that will win over some conservative critics remains to be seen. (Those who have already decided to hate him no matter what will find excuses enough to disparage the effort.) But forget the politics for a moment: This is good policy.

By  |  01:28 PM ET, 11/04/2011

Categories:  2012 campaign, Budget

 
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