http://articles.boston.com/2012-02-2...-spending-cuts
Massive tax cuts proposed by GOP presidential candidates Newt Gingrich and Rick Santorum would cause the national debt to explode while Mitt Romney’s budget plan could generate red ink in line with current projections, according to a new study released Thursday.
The nonpartisan Committee for a Responsible Federal Budget, a Washington-based budget watchdog group, estimates that the wrenching budget cuts proposed by Ron Paul would lessen the flow of red ink compared with current policies but still leave the government running a sizable deficit.
The GOP candidates’ budget plans provide a sharp contrast with President Barack Obama, who released his latest fiscal blueprint just last week that includes proposals to raise taxes on the wealthy.
Like Obama, the GOP candidates have the luxury of suspending political reality and assuming lawmakers would quickly enact their ideas into law.
That translates into a tax code in which taxes on investments and capital gains are sharply reduced or eliminated. Each GOP candidate would eliminate inheritance taxes on large estates. And tax rates on individuals would be cut as well — all in the face of deficits that economists say would eventually cripple the economy.
The results, according to the study, would be higher deficits, except in the case of Paul, whose spending cuts dwarf anything being considered by his three rivals.
According to the study, Gingrich’s plan would add $7 trillion to the nation’s debt over the coming nine years — almost doubling the deficits that would be recorded if the government basically ran on autopilot. Santorum’s plan would add $4.5 trillion over the period, or about $500 billion to the deficit every year on average.
By contrast, Romney’s proposal would add $250 billion to the deficit over nine years, though that estimate was generated before he unveiled a new tax proposal this week that could add considerably to the deficit.
And Paul, whose budget plans include eliminating five Cabinet departments, immediately ending operations in Iraq and Afghanistan, and sharply cutting federal programs like Medicaid and food stamps, would reduce the deficit by $2.2 trillion. He is the only candidate whose spending cuts exceed the amount of revenue lost by cutting taxes.
By the end of fiscal 2016, little more than a month before Election Day, Gingrich’s plan would produce a deficit of 7.8 percent of the economy, or almost $1.5 trillion. Santorum’s blueprint would produce a deficit in the $1.2 trillion range, or 6.5 percent of gross domestic product. And Romney’s plan — given the benefit of the doubt since his new tax plan is so vague — would generate a 2016 deficit of between $700-800 billion or so. Paul’s plan would leave a 2016 deficit of almost $500 billion.
Linear Mode
