I like Glenn Hubbard, but I’m puzzled by his Wednesday op-ed:
Yes, President Obama and Mitt Romney have budgets with competing visions. But Gov. Romney’s budget makes tough choices—tax reform that will require broadening the tax base, spending restraint to return federal spending to 20% of GDP by 2016, and reform of Social Security and Medicare to slow the rate of spending growth for more-affluent individuals.
Romney’s budget doesn’t make tough choices. His tax plan requires broadening the tax base, but it doesn’t name even one deduction or loophole it would eliminate to accomplish that goal. The proposal is so vague in its current form that even Romney says “it can’t be scored.”
Similarly, Romney’s budget does call for spending restraint to return federal spending to 20 percent of GDP by 2016, but it doesn’t name the cuts necessary to get us there. He does propose transitioning Medicare to a premium-support system, but he doesn’t specify the rate at which the vouchers will grow -- which is to say, he doesn’t identify the rate of spending growth.
Romney’s budget does a lot of things. But it steadfastly refuses to make the hard choices required to meet its targets. And Hubbard is doubtlessly aware of all these omissions: As an adviser to Romney, he helped draw up these plans.
The rest of the op-ed is also odd: Hubbard argues that if you run the numbers on President Obama’s budget, “an across-the-board tax increase of 11% for taxpayers with incomes under $200,000 would be required to raise the money the president proposes to spend.”
It’s not totally clear to me what Hubbard’s denominator is here. But, as Austan Goolsbee -- who previously served as chief economist to Obama -- points out, the Congressional Budget Office has scored the president’s budget. It’s page 6, figure 2, in this document. Here’s the table, with the relevant line highlighted in red:
Bottom line: Obama’s budget brings the deficit down to three percent of GDP through 2022. Perhaps Hubbard believes that’s not low enough. But that’s a difference on the proper level of deficit spending, not on the proper level of tax rates over the next decade.