by Mitch Kokai
Senior Political Analyst, John Locke Foundation
In an issue focusing on transcribed interviews, the latest Bloomberg Businessweek queries Republican presidential candidate Mitt Romney about taxes and balanced budgets.
You’ve signed Grover Norquist’s pledge to veto any tax increase as president. You’ve also pledged to get America on the road to a balanced budget. Since you’ve promised not to cut defense or Social Security, where specifically is the money going to come from?
Well, mathematically there are three ways of balancing a budget. One is by cutting spending; one is by growing the economy; and the last is by raising taxes.
The challenge of raising taxes is that it depresses growth. And so like a dog chasing its tail, you can’t get to a balanced budget by simply raising taxes. As a matter of fact, it is ultimately counterproductive. So my plan is based upon reducing spending and putting in place a program of policies that put more people to work and raise wages. So specifically, places that I would reduce spending: First, I will eliminate programs that are not absolutely essential. Obamacare is one of the easiest to eliminate from my standpoint and that saves approximately $100 billion a year. There are also programs I would return to the states where their growth can be managed and where they will be carried out with less fraud, inefficiency, and abuse. So for example, Medicaid, housing vouchers, food stamps, and other programs of that nature, I believe, can best be administered by the states. And finally I will cut the number of federal employees through attrition by at least 10 percent, and I will link their compensation with that which exists in the private sector. The plan that my team and I put in place achieves a balanced budget within eight years and does so without raising taxes.