On the campaign trail, Mitt Romney and Paul Ryan have held the Simpson-Bowles deficit reduction plan in the highest esteem. “My plan is very similar to the Simpson-Bowles plan,” Romney said in early August.
While Ryan actually voted against the plan, he’s stressed that the commission was a clarion call that President simply ignored. The president’s Simpson-Bowles Commission “came back with an urgent report. He thanked them, sent them on their way, and then did exactly nothing,” Ryan said at the GOP convention. “Republicans stepped up with good-faith reforms and solutions equal to the problems.”
But not everyone on Team Romney believes that Simpson-Bowles is worth emulating. Kevin Hassett, a Romney economic adviser, blasted the commission’s plan at an event on Monday:
Simpson-Bowles is already modeled after the typical reform that failed. And the reforms that failed typically fail for a couple of reasons. One is that tax hikes tend to depress economic growth, and the other is that tax hikes tend to give people shelter to avoid the really long-run changes to entitlements.
Romney, by contrast, offers “sustainable fiscal consolidation” that avoids such awful outcomes, while President Obama has taken the worst of Simpson-Bowles and “is pushing it even farther,” Hassett added. Ultimately, trying to replicate Simpson-Bowles is akin saying “we should ignore history,” he concluded.
Such words may sound like political heresy these days, with both Democrats and Republicans paying regular lip service to the plan. But tax experts would agree that Romney’s plan actually bears little resemblance to the hallowed Simpson-Bowles model.
“Bowles and Simpson wanted to increase taxes on everyone — by about $1 trillion over 10 years. Cutting the deficit was their primary goal and, to them, it required a mix of both spending cuts and tax increases,” writes the Tax Policy Center’s Howard Gleckman. “Romney’s aim could not be more different. He’d slash the deficit entirely through largely-unspecified spending reductions and not raise taxes at all.” What’s more, he adds, Simpson-Bowles would raise rates on capital gains and dividends, while Romney would reduce and in some cases eliminate those taxes. And while Simpson-Bowles is extremely explicit about which tax preferences they’d junk, Romney has refused to be specific.
Erskine Bowles himself dismissed the idea that Romney’s tax plan resembles his own, for the same reasons. “I will be the first to cheer if Romney decides to embrace our plan. Unfortunately, the numbers say otherwise: His reform plan leaves too many tax breaks in place and, as a result, does nothing to reduce the debt,” Bowles wrote in the Post.
While Bowles and Hassett obviously differ on the merits about Simpson-Bowles, they’d both agree that Romney’s own plan is worlds away from the commission’s plan.