HERE IS ONE way to distill the confusing charges and countercharges of the first presidential debate:
President Obama has no adequate plan to cope with the frightening level of debt the U.S. government is accumulating.
Republican nominee Mitt Romney has a plan to make it worse.
To understand that harsh assessment, you have to spend a few minutes with some facts that Mr. Romney did his best to obscure Wednesday.
“First of all, I don’t have a $5 trillion tax cut,” he said.
In fact, Mr. Romney has proposed lowering income tax rates, abolishing the estate tax and making other changes that would cost $5 trillion over 10 years. When he says he has no such plan, he means that he intends to make up for the lost revenue by closing loopholes — what’s benignly known as “broadening the base.” Moreover, he says he can close so many loopholes for rich people that the middle class will end up paying less.
But even if you close every rich person’s loophole, you don’t save enough money to do everything Mr. Romney wants to do. The Republican cites studies that he says prove that wrong, but when you look closely, they prove him wrong. For example, Harvard economist (and Romney adviser) Martin Feldstein showed that you could pay for Mr. Romney’s tax cut by taking away deductions — mortgage interest, charitable, state and local tax — from households making more than $100,000. But then Mr. Romney said he considers households earning up to $250,000 to be middle class. So the math collapses again.
Moreover, these deductions are popular — with the real estate industry, with museums and churches and charities that rely on donations, and with taxpayers. So Mr. Romney won’t say which he would trim. He suggested recently that, instead of abolishing any, he might just cap how much a taxpayer can deduct — a plan similar to one Mr. Obama has proposed. But then he’s even less likely to make up for his lost revenue.
If he can’t meet all his goals — rate cut, revenue-neutrality, no tax hike on the middle class — which would give? “My number-one principle is, there will be no tax cut that adds to the deficit,” he said Wednesday night. This directly contradicted the answer his running mate gave just four days earlier. “Keeping tax rates down” would be the number-one priority, Paul Ryan said on Fox News.
The danger is that Mr. Romney and Congress would enact the popular part of his plan, the tax cut, and then rely on the kind of wishful thinking he hinted at last night (“we keep taking in the same money when you also account for growth”). We’ve seen, under Presidents Ronald Reagan and George W. Bush, where such wishful thinking gets you. This time, as the population ages and demands on government grow, the ending could be a lot scarier.
And here’s the really scary part: Mr. Romney’s plan is irresponsible, even if he could pay for it. The bipartisan Simpson-Bowles commission, which he chastised Mr. Obama for not endorsing, concluded that the country cannot solve its fiscal problem without raising revenue and cutting spending. Given the political challenge of raising taxes, it also concluded that the only way to raise revenue would be with tax reform: doing some of the base-broadening that Mr. Romney favors and using some of the proceeds to reduce the debt. By devoting the proceeds of whatever loophole-closing he could manage instead to additional tax cuts, Mr. Romney would just feed the nation’s addiction to debt.