How much will Romney really slash the budget?
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Jared Bernstein Guest blogger
My CBPP colleagues have crunched some important numbers documenting the impact of Gov Romney鈥檚 fiscal plans.聽 To me, their piece is the latest example of a truism in this biz: it鈥檚 easy to brag about how deeply you鈥檙e going cut if you stay up in the clouds; when you get down to earth鈥ot so much.
The Gov鈥檚 problem starts with his proposal to cap federal spending at 20% of GDP (i.e., he could go lower, but he won鈥檛 go higher) and at the same time, increase defense spending to no less than 4% of the economy.
That leaves鈥m鈥et me see鈥arry the naughts鈥hh鈥擨鈥檝e got it!: 16% of GDP for everything else!
As Jon Cohn pointed out last week, this implies massive spending cuts.聽 From our report:
鈥揑f policymakers spread these cuts proportionately across all nondefense programs 鈥� including Social Security and Medicare 鈥� they would have to cut every program by 17 percent in 2016 and 24 percent in 2021.
鈥揑f policymakers protected both Social Security and Medicare, they would have to cut other programs 34 percent in 2016 and 50 percent in 2021.
What do such cuts mean to actual people?聽 Well, cutting Social Security benefits by 17% by 2016 would reduce the average monthly benefit from $1,230 to $1,020 and push more than 2.6 million additional people into poverty.聽 But Gov Romney has said he wants to protect current retirees and those 55 and up (like me!) from such cuts.聽 Doing so would push that 17% to 24%, and put Medicaid and Medicare right in the crosshairs:
鈥揗edicare would be cut by $153 billion in 2016 and $1.4 trillion through 2021. Achieving cuts of this size solely through reducing payments to hospitals, physicians, and other health care providers would threaten beneficiaries鈥� access to care. Thus, beneficiaries would almost certainly face large increases in premiums and cost-sharing charges.
鈥揗edicaid and the Children鈥檚 Health Insurance Program (CHIP) would face cumulative cuts of $946 billion through 2021. Repealing the coverage expansions of the 2010 health reform legislation, as Governor Romney has proposed, would achieve more than the necessary savings. But it would leave 34 million people uninsured who would have gained coverage under health reform.
鈥揅uts in the Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamp Program) would throw 10 million low-income people off the benefit rolls, cut benefits by thousands of dollars a year, or some combination of the two. These cuts would primarily affect very-low-income families with children, seniors, and people with disabilities.
鈥揅ompensation payments for disabled veterans (which average less than $13,000 a year) would be cut by one-fourth, as would pensions for low-income veterans (which average about $11,000 a year) and Supplemental Security Income (SSI) benefits for poor aged and disabled individuals (which average about $6,000 a year and leave poor elderly and disabled people far below the poverty line).
As you see, such proposals may look pretty from the clouds, but on the ground, they provide a stark reminder of just what鈥檚 at stake in the forthcoming election.
