James Pethokoukis

Politics and policy from inside Washington

Romney economic plan: necessary but not sufficient

Sep 7, 2011 20:16 UTC

There’s not much I actually dislike about Mitt Romney’s economic plan. I’m even OK with most of the aggressive China trade policy stuff (though probably not the “retaliation if not revaluation” stuff on the currency).

Maybe my biggest problem with what’s in there is that Romney would leave a 10 percentage-point gap between the top marginal income tax rate and the top corporate tax rate, 35 percent to 25 percent.

It’s what’s not in the Romney plan that I have a real problem with. As I read through the 160-page proposal, here are the questions that popped into my noggin:

1. Why not lower the top income tax rate to 25 percent and also clear out many of the tax preferences/breaks/loopholes? Why just hint at broader tax reform? Why not a flat consumption tax?

2. Why not provide a McKinsey-style breakdown on how Romney would achieve four percent annual GDP growth? Adviser Glenn Hubbard comes so close in the foreword that I am pretty certain he’s read this McKinsey report.

3. Why not eliminate all investment taxes along the lines of a tax reform plan outlined by Hubbard in his recent book, “Seeds of Destruction“?

4. OK, Romney would repeal Obama’s healthcare and financial reform plans. Me, too. But what would he replace them with? Again, Hubbard recently wrote a great book on healthcare.

5. And does Romney really think the big problem with Dodd-Frank is that it’s too tough on the banks? Funding statistics should Too Big To Fail still exists. In event of another financial crisis, how would he handle mass insolvency?

6. Nothing about housing. Really? Really?

7. If Romney doesn’t want to go the full Ryan on entitlement, how about at least Ryan-Rivlin?

I guess my core point is that conservative wonks — including his own campaign economists — have been generating loads of interesting tax, entitlement, banking and housing reform ideas over the past few years. But little if any of that stuff is reflected in Romney’s economic plan. Maybe Romney still feels burned by listening to the Heritage Foundation and its support of an individual health insurance mandate.

America faces big short-term and long-term problems. Romney’s economic plan would start to deal with them. Hopefully there will be more to come. But maybe there won’t be. Maybe Romney is following the Chris Christie election model. Make the incumbent the issue and don’t show much of your hand until in office. But I don’t see how that approach creates momentum for substantive change.

COMMENT

James, this was a jobs plan. You wanted more, perhaps tax policy, spending policy, foreign policy, energy policy,domestic policy, etc? Are you this piggish with all the candidates or just Romney?

Perry you got nothing, Huntman you got slightly more. Bachman, nothing. Cain you got talking points. Why the double standard?

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On climate change, Romney is pretty consistent

Aug 25, 2011 16:49 UTC

What Mitt Romney is saying today about climate change is pretty much what he’s been saying all along. First, here is what he said yesterday:

Asked about global warming at a town hall meeting in Lebanon, New Hampshire, Romney said he believed the world is getting hotter and humans contribute in some way to the change — but could not judge to what extent. ”Do I think the world’s getting hotter? Yeah, I don’t know that but I think that it is,” he said. “I don’t know if it’s mostly caused by humans.”

“What I’m not willing to do is spend trillions of dollars on something I don’t know the answer to.”

In June, a day after launching his second bid for the White House, Romney caused a stir by saying he thought humans had contributed to climate change to some extent. At that time he made a call for a reduction of “emissions of pollutants and greenhouse gases that might be significant contributors” to climate change — a suggestion that was not made on Wednesday.

A Romney aide said the candidate has not altered his position on climate change.

Still, using additional domestic nuclear, natural gas, and other resources could have a side benefit of cutting carbon emissions, Romney said. “My view is pursue a strategy which gets us into energy independence which has as a byproduct it gets us into less CO2 emitting.”

He criticized a bill backed by President Barack Obama that would have capped carbon emissions and allowed polluters to buy and sell rights to emit carbon. ”I do not believe in cap and trade and I do not believe in putting a carbon cap” on polluting industries, Romney said.

In his book “No Apology,” Romney describes his position this way, far more directly:

I believe that climate change is occurring — the reduction in the size of global ice caps is hard to ignore. I also believe that human activity is a contributing factor. I am uncertain how much of the warming, however, is attributable to man and how much is attributable to factors out of our control. … Internationally, we should work to limit the increase in emissions in global greenhouse gases, but in doing so we shouldn’t put ourselves in a disadvantageous position that penalizes American jobs and economic growth.

Romney is clearly in favor of limiting carbon emissions — at least in theory — but does not want to cripple the U.S. economy or spend trillions of dollars for “extreme and expensive measures” like cap-and-trade to do it. He mentions the work of Danish economist Bjorn Lomborg who believes “addressing the remediation of the effects of global warming [is] far more economic and far more humane than massive spending to reduce emissions.”

Romney also spends considerable time in his book explaining the pros and cons of a carbon tax-payroll tax swap, a plan favored by economist and Romney adviser Greg Mankiw and many other Republican-leaning economists. Among the positives, he says:  1) revenue neutrality; 2) higher energy prices would encourage energy efficiency; 3) industry would have a predictable outlook for energy costs; 4) profit incentives rather than government  subsidies would encourage the development of “oil substitutes and carbon-reducing technologies.” And there is this:

Comparative analyses of the tax-swap plan with a cap-and-trade system have demonstrated that the tax swap is likely to be five times as effective in reducing carbon dioxide emissions and, presumably, five times as effective in reducing energy consumption.

Romney does add, however, that “a great deal of work needs remains to be done if it is to become a viable option.”

Bottom line: Romney wants to use markets and incentives to reduce carbon emissions and lower U.S. dependence on overseas oil, not net tax hikes or mandates or regulations. This is not the Rick Perry position, of course. So the issue marks an interesting contrast between the two candidates. Grover Norquist puts it this way: ”If Perry was president, one of the things I’d not worry about is a carbon tax. I’d worry about big spiders eating New Jersey first.”

COMMENT

Sounds like Mitt doesn’t know much period.

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Why Paul Ryan could enter the 2012 presidential race

Apr 26, 2011 16:43 UTC

It’s not just Bill Kristol, gang. There’s desire at the highest ranks of the Republican Party, according to my reporting and sources, to see House Budget Chairman Paul Ryan seek the 2012 presidential nomination. Here’s why:

1) Since Democrats are determined to hang Ryan’s bold “Path to Prosperity” budget plan around the neck of every Republican running for office in 2012,  why not have its author and best salesman advocate for it directly vs. President Obama?

2) Ryan — to borrow a favorite Simon Cowell phrase — is “current.” He’s smack in the middle of budgetary and ideological clash between Democrats and Republicans and would immediately energize conservative and Tea Party activists.

3) Ryan is a strong national defense conservative, as well as pro-life.

4) Ryan is from a battleground state, Wisconsin, and a battleground region, the upper Great Lakes.

5) Ryan’s youth, vigor, likability and Jimmy Stewart persona — well, a wonky version of George Bailey — would be an immediate shorthand signal to voters that he’s a different kind of Republican. He also has a compelling life story to tell.

6) Obama suddenly and unexpectedly to Washington insiders looks beatable — by the right candidate.

The counter-argument here, of course, is that Ryan a) has repeatedly ruled out a 2012 run for family reasons (small kids) and b) may instead run for U.S. Senate in 2012. He also just turned 41 and may not want to go all in so quickly, especially against an incumbent president expected to try and raise $1 billion for re-election. But if Mitt Romney, Tim Pawlenty, Newt Gingrich — maybe Mitch Daniels, too — fail to catch fire, expect the pressure on Ryan to run to rise.

COMMENT

Well, if the economy continues to tank, the GOP could put up a farmyard animal and still win. But assuming it’s competitive, Paul Ryan would be a really bad candidate. I happen to agree with him on most things, and I think he knows lots of good stuff about how to cut the budget. But having seen him on TV a few times, he needs at least five years and a lot of media training to be ready for prime time. Among his most obvious faults are – he talks too fast, he explains complicated issues in long complicated sentences – ie he doesn’t have the gift of explaining complicated things in a simple way, he tries to answer the question rather than get his own talking points across making him a gift for a hostile interviewer (which will be about 98% of them), he gets distracted onto side issues, he distracts himself with subclauses. His manner is eager and puppyish and he totally lacks gravitas. Obama is in reality an empty suit, but he can play a man with gravitas quite well (though the act is beginning to grate pretty badly.) In short, Ryan would look like a clever eager likeable kid against Obama and would be eaten for breakfast. He should stay where he is, sort out the budget process, which certainly requires his cleverness and wonkishness, and come back and stand for President in his fifties when he’s acquired some gravitas. In the meantime, I suggest that the GOP doesn’t put up a farmyard animal just in case it is competitive. I don’t agree with Romney as much as I agree with Ryan (or Perry) but with a GOP Senate and House (which is what there will be if there’s a GOP President) Romney will do just fine. He’ll blow with the wind, and the wind will be coming from Ryan’s direction.

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Who’s up, down for White House 2012

Mar 10, 2011 15:34 UTC

National Journal’s Hotline is out with its insiders’ take on the state of the Republican race for the White House:

nj

Obama’s nightmare jobs chart

Mar 10, 2011 14:07 UTC

The infamous Bernstein-Romer chart, now updated for political freshness:

hellchart

COMMENT

A real nightmare chart would include unemployment under the proposed GOP plan. It’s even higher than the ‘without recovery plan’ pattern.

Posted by Liberaltarian | Report as abusive

Why a Mitt Romney-Paul Ryan ticket seems unlikely

Mar 2, 2011 17:22 UTC

USA-BUDGET/At a reporters breakfast meeting with Rep. Paul Ryan today, Ryan spoke mostly about the budget. (He says the GOP version will deal with entitlements.)

He veered into some 2012 territory, too. Ryan repeated that he will not run for president next year, but added that he didn’t think it served the party well to merely nominate the “next person in line.” Most analysts would say that person was Mitt Romney. That does not mean Ryan opposes Romney. Ryan might think Romney would be a fine candidate — but should not get the gig just because he arguably was the 2008 runner up.

But then again Ryan made a few cracks about Romney’s signature public policy achievement, healthcare reform in Massachusetts. He said it was  not “dissimilar” from Obamacare and was heading into a financial “death spiral.” Ouch.

If Romney were to win the nomination and pick Ryan, you could end up with a weird situation where Obama and Romney would support the Massachusetts plan, with Ryan opposing. Politics is a strange business, but I don’t see how that one would work. Then again, finding conservatives who like Romneycare isn’t easy. So where would Team Mitt find its veep?

Photo: U.S. House Budget Committee Chairman Paul Ryan (R-WI). REUTERS/Jason Reed

The political blowback from healthcare reform

Dec 18, 2009 19:20 UTC

Kim Strassel of the WSJ states her case:

1) Consider North Dakota. A recent Zogby poll showed 28% (you read that right) of state voters support “reform.” A full 40% said they’d be less likely to vote for Democratic Sen. Byron Dorgan next year if he supports a bill. In a theoretical matchup with Republican Gov. John Hoeven (who has yet to announce), Mr. Hoeven wins 55% to 36%. Mr. Dorgan has been in the Senate 17 years; he won his last election with 68% of the vote.

2) In Arkansas, 32% support this health-care legislation. Sen. Blanche Lincoln, also running next year, trails challengers by more than 50 points among the 56% of voters who strongly disapprove of the health plan.

3) Senate Majority Leader Harry Reid, the public face of health reform, can barely break 38% approval in Nevada.

4) In Colorado, where 55% of voters oppose a health bill, appointed Democratic Sen. Michael Bennet told CNN he’d vote for a bill even if it “cost him his job.”

5) In deep-blue Delaware, 46% oppose the health plan. Democrats pounded Delaware GOP Rep. Mike Castle, running for Senate, for voting against the House bill. That vote has in fact kept Mr. Castle leading his expected opponent, Beau Biden, the vice president’s son.

6)  In the past weeks, four well known House Democrats announced they will not run for re-election. All are longtime incumbents; one, Tennessee’s respected John Tanner, co-founded the Blue Dog coalition. These folks have seen the political handwriting on the wall.

So why the stubborn insistence on passing health reform? Think big. The liberal wing of the party—the Barney Franks, the David Obeys—are focused beyond November 2010, to the long-term political prize. They want a health-care program that inevitably leads to a value-added tax and a permanent welfare state. Big government then becomes fact, and another Ronald Reagan becomes impossible. See Continental Europe.

Me: Yup. Ds, who also no doubt think healthcare reform is good and moral policy, see a long-term political advantage.  Indeed, they often talk about the structure of reform as more important than details. Those can come later. But change the structure of 1/6th (and climbing) of the nation’s economy and you change its politics, too.

COMMENT

The truth is that Congress wants to escape any suggestion of having to pay for healthcare benefits, and would prefer that corporations pay the bill and “hide” the cost from consumers.

A more honest health policy was presented in detail by Ezekiel Emanuel, which would have paid for universal healthcare with a dedicated value-added tax. It would have been progressive in that the cost would have burdened citizens in proportion to their consumption which is directly related to their disposable income. And, since everyone would pay for healthcare this way, those who now receive free attention in hospital emergency rooms would also contribute.

The VAT would have put the focus on the direct cost of healthcare in the percentage level, so citizens would be aware that demands for increased services would have an impact on their ability to pay for other things. Healthcare expenditures are now around 17% of GDP and will represent fully one-fifth of GDP by 2018.

Replacing the direct corporate burden of healthcare premiums with a VAT would have removed a major cost disincentive to employment, and would also have made imports share the burden equally with domestically produced goods and services. And, because the VAT is a border-adjustable tax, so used for healthcare insurance, it would have been subtracted from exports making our products more competitive abroad as well as at home.

Too bad this plan did not receive more attention from the press as well as the Congress.

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Dobbs, 2012 and the ghost of Perot

Nov 27, 2009 15:45 UTC

If former CNN anchorman Lou Dobbs decides to make an independent bid for president in 2012, he will probably find the political climate as hospitable for an insurgent run — if not more so — as it was in 1992, when Ross Perot captured a fifth of the popular vote. (It was the best showing by a third-party candidate since Bull Moose Teddy Roosevelt finished second with 27.4 percent of the vote in 1912.)

The dreary economic New Normal that is the aftermath of the Great Recession has created a huge political opening for Dobbs or Michael Bloomberg or Sarah Palin, or some other American with high visibility or deep pockets or both.

It was a slow-recovering economy and concern about big deficits that drove the Perot phenomenon. There’s a high probability both factors will be at play three years from now. The Center on Budget and Policy Priorities forecasts annual budget deficits to average $1.2 trillion over the next three years. And the Federal Reserve is forecasting a so-so economic expansion that will leave unemployment over 7 percent in 2012. Overall, the nation’s economic mood might be a lot worse than it was in 1992.

Then you have a populist, anti-Wall Street sentiment that neither Democrats nor Republicans have been able to capture successfully. The result is that party loyalties are frayed, with the tea party movement one manifestation. According to the Pew Research Center, 36 percent of Americans identify themselves as independents, the highest number since 1992. And they seem to be up for grabs. Barack Obama won 52 percent of the independent vote in 2008. But a recent poll by Rasmussen Reports shows Obama with a 61 percent disapproval rating among the group.

None of this means an independent would actually win. Rasmussen has Dobbs at 14 percent in a race with President Obama (42 percent) and Mitt Romney (34 percent.) With the more populist Palin replacing Romney, Dobbs gets 12 percent versus 44 percent for Obama and 37 percent for Palin.  Yet without Dobbs in the race, Romney is tied with Obama and Palin trails by just three. So an independent could, at the very least, radically alter the political landscape.

And not just for the GOP. Unhappiness about an escalation in the Afghanistan war and muddled healthcare reform could create a more liberal independent challenger. Take Howard Dean, for instance. The former Vermont governor and chairman of the Democratic National Committee has been ripping ObamaCare lately and says he would vote with Sen. Bernie Sanders of Vermont, an independent socialist, against it if he were a senator. And Dean sure knows how to use the Internet to raise money, as he showed in his 2004 run for the Democratic nomination.

But here is the bottom line: If the New Normal turns out to be worse than expected, with the GOP blamed for the original collapse and Democrats for a bungled remedy, an independent might accomplish much more than just being a spoiler.

COMMENT

Jim Gilchrist,who is a leader of more than a million Minuteman, Viet Nam vet with Purple Heart and other medals, charisma, well spoken, well known, been on turncoat Lou Dobbs Show, idiot Larry King Live Show and Fox News etc. retired accountant and nice guy. The fact that he is not a corrupt politician is gold. He will have the Minutemen,people who think like the Minutemen like us and the Vets behind him. He is a lot better than obama and the ones on the right by far for president.Lou Dobbs is a con artist with a hidden agenda for Money and Fame. Anyone who is really against amnesty and illegal has it in them like an arm or a leg. So he was never against amnesty and illegal from the beginning. Just the only way he could get Money and Fame. Schemer with illusions of Grandeur. Opportunist. Who is going to vote for him now other than his own family? That turncoat is a joke. The stunt he pulled would be like Rush coming out and saying he was really a Democrat. Dobbs stabbed his listeners in the back with really being for amnesty all these years for the money. But telling his audience he was against amnesty, illegal like them. Should be some kind of law against it.Palin is another one who is a schemer with illusions of grandeur. Opportunist. United the Republican base with religion and morals. She is copying bush’s strategy of using the fundies to be elected. After the fundies left the oval office bush and the Republicans made fun of them. How can these fundies be duped twice? But then the liberal left fundiea and left are duped by obama. Separation of Church and State. What is she going to do rule the country with the Bible instead of the Constitution? Well seeing as how she didn’t know what NAFTA was she doesn’t know the Constitution either. She left being governor of Alaska with how many? 50 ethic violations? She was against the poor polar bears etc when she was governor. Hypocrite hunts for the thrill of the kill. She is a big joke too.4th generation Democrat no longer and never again. There is no such thing as a Democrat today. My father’s Democratic Party when men were men and took care of their own, would never have been for illegal, foreign workers, amnesty, CAFTA, NAFTA, outsourcing, North American Unoin, NWO etc. like these so called Democrats today. The Democrats of today are just the opposite of my father’S Democratic Party, who were all for the Americans and US Made.

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