How Mitt Romney's new plan would change Social Security and Medicare
Republican presidential candidate Mitt Romney has laid out his fiscal plan 鈥渢o turn around the federal government鈥� by axing or reducing programs 鈥� including what could be significant changes to Medicare and Social Security.
As might be expected from a relatively moderate Republican, Mr. Romney鈥檚 plan is not as drastic as others, such as fellow GOP presidential candidate Rep. Ron Paul鈥檚, which would eliminate several departments of federal government, or House Budget Committee Chairman Paul Ryan鈥檚 controversial plan, which Democrats say would 鈥渒ill Medicare.鈥�
Still, Romney鈥檚 pledge to 鈥渕ake government simpler, smaller, and smarter,鈥� declared Friday in a speech to the tea party-aligned group Americans for Prosperity, was embraced by Congressman Ryan. That鈥檚 sure to set it up as a target for Democrats and for President Obama, as the incumbent president looks for ways to win reelection at a time when the US economy sputters and congressional Republicans reject his jobs-creating efforts.
鈥淭his is a great development,鈥� Ryan told Washington Post conservative columnist Jennifer Rubin, regarding Romney. 鈥淚t shows that the elusive adult conversation is taking place.... This tracks perfectly with the House budget.鈥�
Among the elements in Romney鈥檚 plan:
- Cap federal spending at 20 percent of gross domestic product (it was 24.3 percent last year), which would require spending cuts of approximately $500 billion per year in 2016, assuming the economy grows about about 4 percent annually. (The US grew by 2.8 percent in 2010.) The plan would also reverse defense cuts in Obama administration budgets.
- Cut nonsecurity discretionary spending to below 2008 levels by cutting such spending 5 percent across the board.
- Privatize Amtrak, saving $1.6 billion.
- Reduce subsidies for the National Endowments for the Arts and Humanities, the Corporation for Public Broadcasting, and the Legal Services Corporation, saving $600 Million.
- Eliminate Title X family planning funding that benefits groups like Planned Parenthood, saving $300 million.
- Reduce foreign aid by $100 million, particularly to countries the US borrows money from, including China.
- Reduce the federal workforce by 10 percent through attrition, align federal employee compensation with the private sector, and repeal the Davis-Bacon Act, which, according to Romney, 鈥渇orces the government to pay above-market wages, insulating labor unions from competition and driving up project costs by approximately 10 percent.鈥�
On Social Security, Romney would 鈥済radually raise the retirement age to reflect increases in longevity and slow the growth in benefits for higher-income retirees.鈥�
Similarly, Romney indicates a gradualism on Medicare.
鈥淔irst, Medicare should not change for anyone in the program or soon to be in it,鈥� he said in his speech Friday.聽鈥淲e should honor our commitments to our seniors.鈥�
鈥淭omorrow鈥檚 seniors should have the freedom to choose what their health coverage looks like,鈥� he continued.聽鈥淵ounger Americans today, when they turn 65, should have a choice between traditional Medicare and other private health-care plans that provide at least the same level of benefits ... as with Social Security, the eligibility age should slowly increase to keep pace with increases in longevity.鈥�
Many of the details in Romney鈥檚 plan are yet to be revealed, but his political competitors were quick to weigh in.
鈥淗e pandered to interest groups and offered timid reforms to government spending, all the while trying to convince voters he will magically balance the budget anyway,鈥� said Tim Miller, the campaign spokesman of Jon Huntsman Jr., in a statement. 鈥淕overnor Romney's plan that protects subsidies, the Defense Department, and nibbles around the edges on entitlements leaves no doubt that he has no realistic plan or intention to honestly balance the budget.鈥�
Rick Perry鈥檚 campaign took the occasion to note Romney鈥檚 support for the 2008 Wall Street bailout, the subject of Mr. Perry鈥檚 attacking Romney.
"Any proposal from Mitt Romney to reduce government spending that does not end government bailouts is not a serious plan to reduce government spending," said Perry spokesman Ray Sullivan in an e-mail to reporters.
Obama鈥檚 reelection campaign jumped in as well.
鈥淢itt Romney鈥檚 proposal 鈥� places a great burden on the middle class and the elderly, and instead of asking all Americans to do their fair share it continues to offer special breaks for large corporations, millionaires, and billionaires,鈥� said Obama for America press secretary Ben LaBolt in a statement.
鈥淢uch of Mitt Romney鈥檚 plan is a carbon copy of the House Republicans鈥� budget,鈥� Mr. LaBolt emphasized, tying Romney to Ryan. 鈥淚t would wipe out investments essential to creating jobs and promoting growth and would leave millions of older Americans to fend for themselves by privatizing Medicare.鈥�
In a聽, the Democratic National Committee said Romney鈥檚 plan would seriously hurt middle-class families, saying the plan was something "only a billionaire could love."
