Mitt Romney - Debt, Deficit, Spending, and the Size of Government
Summary
Governor Romney approaches the deficit and debt crisis from a spending standpoint. He does not belief that the government needs to take in more money, but that it needs to simplify it's tax system and reform entitlement spending.
During a 2010 speech, Governor Romney stated that baby boomers ran the risk of being labeled the "worst generation" after granting themselves large entitlements and then passing the cost of those entitlements onto the next generation. In 2011, Governor Romney wrote an op-ed in the Orlando Sentinel applauding the TEA party movement to reduce the size of government. He cited the 2009 Stimulus, Obamacare, and obligations to social security and medicaid as items that need to be fundamentally reformed to bring spending under control.
The focus on entitlement spending control was continued as Governor Romney reacted to a speech by President Obama on the deficit by stating that even the President's own deficit commission cited entitlement reform as the primary item to be addressed when reducing spending. He was critical of President Obama's "tax the rich" tactic. In a Manchester, New Hampshire town hall, governor Romney noted that 20% of spending is discretionary, 20% is military, and 60% is entitlement. He noted that without controlling the growth of these programs, the deficit and the debt cannot be controlled.
Governor Romney's campaign website statements from 2012 mirror this stated need to address entitlement reform to fix the debt. He notes the repeal of Obamacare and the reform of Medicare, Medicaid, and Social Security as fundamental to fixing the debt crisis. Governor Romney also states that he will place a hard cap on federal spending. However, he does not pledge to balance the budget but rather to place the country on a path to a balanced budget.
The Believe in America plan that Governor Romney proposed as part of the 2012 presidential campain devoted a large portion to fiscal policy and addressing budgetary shortfalls. Governor Romney's plan consists of capping spending at 20% of GDP and cutting non-security discretionary spending by 5 percent. He expressed support for returning to spending levels of previous years. He also states that entitlement reform will reduce spending, but does not give specifics on that reform. He states that he will reduce the government workforce by 10% by hiring one person for every two that retire. He also calls for a balanced budget amendment.
In the 2012 primary, Governor Romney began to run ads that stated that the US government had a moral obligation not to spend more than it takes in.
Worst Generation
In March of 2010, Governor Romney gave a speech in which he discussed the need to reform entitlements to address the looming spending problems and the national debt. He refered to those who put the entitlements in place and then failed to fund them as having the possibly of being remembered as the "worst generation."
I have a chapter in my book called "The Worst Generation?," my generation. We have put in place so many entitlements for ourselves, we have spent so much money, we have borrowed so much, we have nearly $70 trillion dollars of obligations, unfunded obligations, to us ... to the baby boomers ... and what I am doing is trying to find a way to reduce those things, not for me, but for your generation. The conservatives are trying to make sure that the young people that come behind us get to experience the American dream. I will be long gone before any of that debt is paid off, and the interest is truly paid off. I don't want to leave as my legacy ... I don't want to bequeth to the next generation these extraordinary burdens. Somehow, we've got to communicate to the young people of this generation that the liberals will keep on borrowing more money from the Chinese, and adding more and more obligations on them.
Rein in Government
On April 11, 2011 Governor Romney wrote an article in the Orlando Sentinel discussing the need to rein in government. He discusses the negative effects of large governments and possible remedies.
Mitt Romney: Rein in government — starting with Obama
April 14, 2011|By Mitt Romney | Guest columnistThere's some good news and some bad news as we mark the unhappy occasion of the April 18 tax filing deadline. Let's start with the good news.
For the first time in the post-World War II era, there is a significant popular movement to scale back government and reduce the tax burden that has been stifling our economy. A lot of this is because members of the Tea Party are making their voices heard.
Almost 21/2 centuries after the original Boston Tea Party of 1773, the idea of limited government that inspired our forebears is very much alive. The growth of government is not some inexorable force. In a democracy, we the people decide. Thanks to the Tea Party, there's real hope that we can rein in our profligate federal government.
But in order to make progress, we have to first rein in President Obama, whose spending binge is driving our national debt to historic highs. When Obama took office in 2009, the national debt was about 50 percent of the Gross Domestic Product. Over the past two years, our national debt has risen to about 70 percent of the GDP and is expected to be 100 percent of the GDP by 2020.
The Obama administration's $800 billion stimulus package is one-half of the unfolding disaster. The other half is Obamacare, which will cost more than a trillion dollars unless it can be repealed — something the next president must make a priority on Day 1 in office.
These staggering new burdens are made worse by the fact that our system of taxation is killing our nation's once-strong economic engine. The mind-boggling complexity of our tax system is only part of the problem. As of last year, the U.S. tax code had mushroomed into 71,684 pages that no one human being can fully understand. Along with complexity comes a dizzying array of perverse incentives.
For example, we tax companies that make money overseas if they want to bring the money home, but we don't tax them if they keep it abroad. The result is that as much as a trillion dollars in private capital is parked offshore. With proper incentives, that money would be infused into our economy and invested in new equipment and factories. Repatriating a trillion dollars could create lots of good, permanent, private-sector jobs.
Then there are the disincentives that flow from the high rates themselves, for entrepreneurs, small business owners and other job-creators. American employers bear the highest tax burden in the world, tied with Japan and above even European countries like Italy and France. But instead of making ourselves more competitive by reducing rates across the board, we've created myriad loopholes that are confusing to everyone except the lawyers, accountants and lobbyists who make a living off them.
We have also built a paralyzing uncertainty into our system. In December, Congress and President Obama agreed to temporarily extend the Bush tax cuts. But under the terms of the congressional compromise with the White House, high rates will come back into force in two years unless Congress acts again. Every entrepreneur, every small business owner and every employer knows that the clock is ticking. This uncertainty translates directly into caution about investing and taking on additional workers.
A smart tax system would reward investment, savings and entrepreneurship, while providing job-creators with the predictability and stability they need to grow our economy. But our tax system is not smart; it's quite the opposite. It needs urgent reform that reduces rates and restores a climate of confidence in our economy. With millions of Americans seeking but not finding work, a transformation of our approach to taxes is both an economic and moral imperative.
But reform requires both understanding and leadership. Unfortunately, when it comes to those qualities, we are facing Washington's biggest deficit of all.
From Wrong to Dishonest
In April of 2011, Governor Romney wrote an opinion piece for the National Review Online in which he discussed President Obama's recent speech on the national debt. He states that the President was initially wrong on hissolution to the debt crisis, and then he was dishonest in how the problem could be addressed.
President Obama Goes from Wrong to Dishonest
April 14, 2011 7:24 P.M. By Mitt Romney
America saw a different President Obama yesterday. Over the last two years, the president’s job was to repair the economy and to make us safer. He has failed at both but at least he appeared to be trying — his failures were arguably attributable to inexperience, misguidance, and incompetence. Yesterday, however, the president went from being wrong to being deceptive and intellectually dishonest.The peril of our nation’s present fiscal course has been amply documented. The facts are settled. The president’s own bipartisan deficit commission proposed entitlement and spending reforms to restore fiscal responsibility. The Republicans in the House of Representatives and Chairman Paul Ryan have offered alternative reforms of their own. With the resulting national recognition of financial peril, the country was presented with a once-in-a-generation opportunity. As the president summoned the nation, change was hoped for. Demagoguery, divisiveness, and deception is what we got.
Of course, it was predictable that the president would call for “tax hikes for the rich” even as he surely knows that extending the Bush tax cuts has been the single feature of the December tax compromise that has contributed most to stimulating the economy. And as he excoriates millionaires and billionaires — a politically delicious target — he also surely knows that the higher taxes he promises will impair America’s vital small businesses, depressing job and income growth for everyone.
Even so, if these shortcomings had been the only fault of the president’s speech, his performance would at least have been consistent with those of his past. But in refusing to endorse any — any — substantive reforms of our runaway spending and entitlement programs, and in impugning the motives of those who have put forward such proposals, the president’s performance went from wrong to bad.
The matter of spending and reform is no longer about politics. It is about preserving America’s future. The president’s descent is disheartening and dangerous.
Manchester Town Hall
On June 3, 2011 Governor Romney held a town hall at the University of New Hampshire in Manchester, Governor Romney was asked what he would do to address the debt crisis in Washington (Comments at 26:20).
Question: Governor, when you get to Washington, how do you plan to get this spending under control?
Governor Romney: Thank you. What do you do about the spending? How do you deal with this? Right now, we got our colleagues in the House that are doing a heroic job. They're using every source of their strength to fight the excessive spending in this administration, and I applaud them for that. They say that they're not gonna raise the debt limit unless they see a commensurate reduction in spending in our future. Congratulations to them for keeping that battle going on.
How would I deal with it? Well there are really three parts of the budget. The first is what we'll call discretionary spending, that's about 20% of the budget, and that's gotta come down a lot. We got a lot of programs in Washington that we don't like. Well, we don't have to have them.
When I came in as Governor, we had a $3 billion dollar budget gap. There was not $3 billion dollars all of just waste. There was some of that doing stuff we liked, but we simply couldn't afford. At the federal level, we are now spending money on things we like, but we have to borrow money from the Chinese to pay for it. That doesn't make sense. So I'll be willing to go through the budget and say "You know some of these programs, I like them, but we aren't willing to pay for them by borrowing and putting this burden on my kids future. So that's number one. That's the discretionary part, that's about 20% of the federal spending.
The next 20% of federal spending is military. There's a lot of waste in the military. But that waste I would like to eliminate, and not use it to but more programs, and not to fund programs I like, but to build a strong an modern military. If we're gonna send our men and women into harms way, and we have them now in harm's way in three places at least, I want them to be well protected, well secure, the best military in the world.
Our Navy has been depleted and is on a path to be even more depleted. Air Force likewise needs to be modernized. I know that we're putting into place a new series of jets to do fueling for our fighter aircraft, in-air fueling, and I'm glad that they're doing that, that's fighters for the Navy, but you know the fuelers that we have now, I believe are 707s, and these were built in the 1960s. I mean, we have a very, very old Air Force and we need to bring it up to date. And I would add more boots on the ground for our military, I'd have more soldiers in our Army, and finally, I'd make sure that we have enough funds to take care of our veterans in the way that they deserve to be taken care of.
So I've only gone through 40% of the spending. 20% of the discretionary, 20% of the military. Then comes 60%, and 60% are the so-called mandatory programs, which are largely entitlements. Medicaid, which is the program for the poor, that I would send back to the states. I would let the states care for their own poor and their own uninsured in the way that states feel best. That is the way to reduce costs, it is the way to reduce fraud and abuse, get those dollars back to the states, and that'll hold down costs.
The next two are Social Security and Medicare. Programs for our seniors. No one in my party has proposed any changes to those programs for anybody near retirement or in retirement. So anybody whose 60 or older don't even need to think about changes. The question is, what are we gonna promise people in their 20s, 30s, 40s, and 50's? And the answer is, let's tell them the truth. Let's not give them promises that we know can't possibly be met.
So I want to tell people the truth. I know that representative Ryan has put a plan out. It's not the same as what I'll put out, but it takes a step forward in saying "How can we spend only what we take in, how do we make these programs sustainable." I want to keep medicare and social security. I do not want to see them jeopardized. So we want to make sure we put programs out that we can honor and that we can commit to the next generation that we will be able to fund.
So, I'm going after those areas. Entitlements that we'll be able to fund, we'll send Medicare back to the states, and we'll cut dramatically our discretionary budget. And by the way, I will assure you that if I am President of the United States I will ensure you that I will get America on track to have a balanced budget, It is immoral in my view for us as a nation to continue to spend (inaudible)...
Believe in America
On September 6, 2011 Governor Romney proposed an economic plan entitled Believe in America. One section of that plan was devoted to fiscal policy. The governor noted the need for a balanced budget, a spending reduction, a reduction in the government work force, and a cap on spending.
Fiscal Policy
- Cut federal spending and cap it at 20 percent of GDP
- Block grant Medicaid and pursue further entitlement reform
- Reduce the federal workforce
- Restructure the federal government
- Pursue a Balanced Budget Amendment
Why is the U.S. economy not creating jobs? In any market economy there is an inevitable competition between the public and private sector for resources. Both sectors depend upon a flow of capital to survive. But every dollar that the government borrows for its operations is a dollar that cannot be invested in productive private-sector activity. Runaway federal spending thus tends to crowd out private investment. At a moment when the public sector is flourishing as never before, it is unsurprising that the private sector has withered.
Government spending also skews the marketplace. As federal funds slosh through the economy, they lift up some enterprises at the expense of others. In an environment where the government is picking winners and investing huge sums in projects of questionable value, private entrepreneurs across the economy cannot have confidence that their own investments will pay off.
Finally, unsustainable government spending creates high levels of uncertainty about the future. Aware that such spending cannot continue indefinitely, business owners have a difficult time predicting how demand will shift from year to year and how to invest accordingly. Furthermore, every new dollar the government spends must eventually be collected in taxes. When the government attempts to stimulate the economy by spending more, financed by borrowing instead of tax increases, businesses and consumers may see an uptick in economic activity. But they also know that a bill will come due, in either the immediate form of higher taxes or the longer-term form of escalating debt and the ensuing instability. The only recipe for fiscal health and a thriving private economy is a government that spends within its means.
The Obama Approach: Deliberate Disaster
In the twentieth century, the United States increased spending dramatically in three instances: World War I, the Great Depression, and World War II. We are now in the midst of another spending surge. Over the first three years of President Obama’s tenure in the White House, federal spending grew from $2.98 trillion to $3.82 trillion, an enormous 28 percent increase. Future spending is also expected to continue expanding unchecked. This sharp rise has been entirely a matter of choice. Even as federal spending remains wholly within our control, Washington is spending money in an out-of-control fashion. This is a binge of choice. By every metric used to gauge federal expenditures, the United States is careening down a dangerous path.
Exploding Spending
One traditional yardstick for gauging whether government is living within its means is spending as a percentage of GDP. Since the 1950s, federal spending has hovered around 20 percent of GDP. When President Obama took office, it shot up to 25 percent, where it remains today, a level not seen since America was fighting World War II. Before the recession, the federal government spent $25,000 per household. Since President Obama took office, that number has soared past $30,000 and is on track to hit $35,000 within the next decade, even after adjusting for inflation.
While measurements of spending in terms of GDP or on a per-household basis can be useful indicators, they do not begin to convey the level to which spending will explode if left unchecked. In 2010, actual federal spending was $3.5 trillion. Under Congressional Budget Office calculations, President Obama’s fiscal year 2012 budget places the nation on a trajectory that will increase federal spending over the next ten years, leading it past the $4 trillion threshold in 2015, the $5 trillion mark in 2019, and on its way to $5.8 trillion by 2021—approximately twice its level when he took office.
Unsustainable Deficits
Another useful yardstick of fiscal health is federal indebtedness as a percentage of GDP. Since 1945 the historical average has been 44.5 percent. By this measure, in the year before President Obama assumed office our country’s indebtedness was at a relatively responsible level of 40.3 percent. In the first year of President Obama’s term, it soared to 53.5 percent and in 2010 it continued its ascent to 62.2 percent. Current projections have it hitting 72 percent by the end of 2011.
The driver here, of course, is our soaring annual deficit, which averaged $164 billion in the ten years before President Obama took office, is today $1.3 trillion, and is projected to be still above $1 trillion in ten years. Under President Obama’s proposed fiscal year 2012 budget, America will have to borrow 43 cents for each dollar spent—a ratio of overspending that no responsible family living on a tight budget would consider.
Annual deficits are an unsurprising consequence of a recession-induced shortfall in government revenues. But even if revenues rebound as they are projected to do, our long-term deficits will persist. If current tax rates are maintained and the Alternative Minimum Tax is patched, revenues will match their 18-percent-of- GDP historical average within a decade. The trouble is that federal spending is projected to increase at a more rapid clip than revenue growth. The cause of our long-term deficit problem thus lies squarely at the feet of federal spending ratherthan a sustained revenue decline. If current trends continue, our great country is in danger of eventually becoming the next Greece or Portugal—except that if our finances fail, there will be no one to bail us out.
A “Balanced Approach”
Our untenable spending habits were at the root of this past summer’s crisis over the debt ceiling. President Obama’s insistence on a “balanced approach”—by which he meant a combination of spending cuts and tax increases—would have put a seal of congressional approval on a baseline level of spending significantly higher than when he took office. That is precisely why the President’s approach had to be soundly rejected. He wanted to move the country in the wrong direction of more taxes and more spending at a time when both are smothering the economy.
Mitt Romney’s Plan: Cut, Cap, and Balance
Mitt Romney recognizes that we are on an unsustainable course. He believes we must take immediate action to rein in excess spending and begin the process of fundamental budget reform. Washington’s addiction to spending has been ignored for far too long. Under President Obama, the government has actually tried to make a virtue of its addiction to spending. We must act swiftly to chart a course of fiscal responsibility that will guarantee that a strong, stable dollar remains the world’s reserve currency and that will support the robust economic growth necessary to create jobs and restore America’s future.
Although the last ten years can be referred to as a Decade of Deficits, it was not that long ago that the United States enjoyed budget surpluses. From 1998 to 2001, the federal government managed to balance its budget and successfully applied surpluses toward debt reduction. During that period, debt held by the public was between $3 and $4 trillion. Just about a decade later, yearly deficits of a previously unthinkable magnitude have led the amount of debt held by the public to swell to $10 trillion. To return the United States to the path of fiscal discipline, America must cut its government spending, cap that spending at a sustainable level, and pass a Balanced Budget Amendment to the Constitution. Cut, Cap, and Balance are three words that are spoken far too rarely in Washington. But they encapsulate the conservative approach that Mitt Romney has advocated since the debt ceiling controversy began last spring. In a Romney administration, they will be heard loudly and acted upon in a consistent manner.
Cut and Cap the Budget
As president, Mitt Romney will immediately move to cut spending and cap it at 20 percent of GDP. As spending comes under control, he will pursue further cuts that would allow caps to be set even lower so as to guarantee future fiscal stability. While getting the federal debt under control will be a long and arduous task, the first step toward recovery is admitting we have a problem and refusing to allow any more irresponsible borrowing. The good news is that many Americans have awoken to the problem. The rise of the Tea Party is a classic instance of the self-correcting forces of American democracy in action. One way or another, Washington will get the message that we must live within our means, spend only what we take in, and pay down our debt. Romney will move immediately to cut non-security discretionary spending by 5 percent. But more will be required to bring the budget under control. The plan the House passed earlier this year to return non-security discretionary spending to below pre-Obama levels is a step in the right direction that could save hundreds of billions of dollars over the decade.
Enact Entitlement Reform
Any serious attempt to rein in spending will have to include entitlement reform. This issue is among the most complex facing policymakers, but some basic principles guide Mitt Romney’s position. First, we must keep the promises made to our current retirees: their Social Security and Medicare benefits should not be affected. But second, we should ensure that the promises that we make to younger generations are promises we can keep.
With respect to Social Security, there are a number of options that can be pursued to keep the system solvent—from raising the eligibility age to changing the way benefits are indexed to inflation for high-income retirees. One option that should not be on the table is raising the payroll tax or expanding the base of income to which the tax is applied. Similarly, with respect to Medicare, the plan put forward by Congressman Paul Ryan makes important strides in the right direction by keeping the system solvent and introducing market-based dynamics. As president, Romney’s own plan will differ, but it will share those objectives.
Romney will also work to reform and restructure Medicaid. Currently, the federal government writes the states a blank check for the program. Each state decides how much to spend on Medicaid, and Washington reimburses them as much as 80 percent of the cost. It does not take an economist to recognize the problems with having one level of government make the spending decision while another pays the bill. States have every incentive to expand Medicaid spending— at the expense of other state priorities such as education, and with little regard for efficiency—in order to maximize their federal subsidy. And with federal money comes federal strings attached. Washington micromanages decisions as to who and what the states must cover, and forbids states from experimenting with new approaches that might improve care and reduce cost. The result is a Medicaid system that generates poor health outcomes at enormous expense. As president, Romney will push for the conversion of Medicaid to a block grant administered by the states. This approach could save the federal government over $200 billion each year by the end of the decade, while also providing states with the flexibility to develop innovative and effective approaches best suited to their needs.
Reduce the Federal Workforce
A complementary step would be to align the wages and benefits of federal workers with market rates and then work to reduce the overall size of the federal workforce by 10 percent. Since the economic downturn began in 2007, hardworking Americans across our great nation have learned to do more with less. Businesses across America have responded to harsh economic realities by downsizing operations and cutting their workforces. Yet despite widespread lay-offs in the private sector, President Obama has continued to expand the size of government. While the private sector has shed 1.8 million jobs since he took office, the federal workforce has grown by 142,500, or 6.9 percent. The President is planning for yet more federal employee job growth. His 2012 budget adds 15,000 more employees to the federal payroll.
As president, Mitt Romney will not only halt this growth, but work to cut the current size of the federal workforce by 10 percent through attrition. This could be achieved by hiring only one new employee for every two who leave federal service in a Romney administration. Such a “1-for-2” system would have the benefit of reducing the number of federal employees while allowing the introduction of new talent into the federal service. The approach would also allow the president flexibility to allocate the new hiring to those areas where additional resources could be put to most effective use.
Undertake Fundamental Restructuring
Reining in the federal government’s runaway spending promises to be an enormous undertaking. Taxpayer money is being used to underwrite a maze of rules, regulations, and overlapping government agencies whose complexity defies the understanding even of those who inhabit the system. Far too often, government is counterproductive and wasteful. One of Mitt Romney’s most important goals is peeling away the duplicative and dysfunctional layers of bureaucracy that prevent government from serving the people.
As with the restructuring of any large organization, a first step in reform is acknowledging that the federal government cannot be everything to everyone. There are many functions and services that the private sector can perform better than the public sector. For instance, the government-run railroad, Amtrak, lost money on 41 of its 44 routes in 2008. Losses per passenger ranged from $5 to $462. That’s no way to run a railroad. If given a shot, the private sector will certainly do a better job.
There are many other functions and services that the 50 states can manage better than Washington. We should seek out such functions and devolve power and responsibility to the level at which the taxpayers will be best served. Giving states control of Medicaid via block grants, just discussed, is by far the largest such opportunity. But the federal government has been usurping state authority in countless ways since at least the New Deal era. Every government program and budget must be subjected to an intense top-down review to determine, first, whether tax dollars are being spent wisely and efficiently, and, second, whether there are more suitable alternatives to currently flawed approaches.
Pursue a Balanced Budget Amendment
We also must put controls in place to ensure that we never see a repeat of the explosive spending and borrowing of the past few years. A Balanced Budget Amendment to the Constitution is necessary to ensure that our nation embarks on a path of long-term fiscal discipline, and as president, Mitt Romney will introduce one in Congress and fight for its passage. A properly constructed amendment would guard against the use of net revenue increases to achieve balance by requiring a super-majority for the passage of any tax hike. And it would include only very limited exceptions, such as for war or national security emergencies.
As some economists and political scientists have argued, powerful incentives sometimes motivate our legislators to enact expensive programs that may not be in the long-term interests of their constituents, let alone our society as a whole, once costs are taken into account. But with the public unwilling to support higher taxes, Congress pays for the programs with borrowed funds. There is thus a mismatch between what Congress does to advance its own short-term interests and what is in the national interest. If new programs had to be paid for with taxes, legislators would be exceedingly reluctant to enact them absent widespread consensus that they were worth the cost. A Balanced Budget Amendment to the Constitution would eliminate the incentives that drive Congress to spend ever more money on programs while asking future generations to pay for them.
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Mitt Romney has extensive experience in both the private and public sectors and he has a long history of making hard choices. As governor, he consolidated state agencies, encouraged the sharing of resources among departments, and reshaped wasteful programs by aligning incentives with actual goals. He is deeply committed to the conservative idea of limited government. If the federal government needs to be cut and reshaped—and it is in dire need of both—Mitt Romney is the man for the job.
New Hampshire Debate
In June of 2011, Governor Romney participated in the Presidential debate in New Hampshire. He spoke about the need to lower spending before a deal is reached to raise the debt ceiling.
VAUGHN: John, thank you very much.
Governor Romney, I'd like to ask this to you first, please.
The Treasury Department says the United States will hit its credit limit on August the 2nd. Do you believe we will ultimately have to raise the debt ceiling?
ROMNEY: I believe we will not raise the debt ceiling unless the president finally, finally is willing to be a leader on issues that the American people care about. And the number one issue that relates to that debt ceiling is whether the government is going to keep on spending money they don't have.
And the American people and Congress and every person elected in Washington has to understand we want to see a president finally lay out plans for reining in the excesses of government.
You've heard on here a whole series of ideas about entitlements. And that's about 60 percent of federal spends. That's a big piece. That's a big chunk. Ideas from all these people up here.
Where are the president's ideas?
Each person has different ideas here. We can try them and try different ideas in different states and different programs at the federal level.
But why isn't the president leading? He isn't leading on balancing our budget and he's not leading on jobs. He's failed the American people both in job creation and the scale the government.
VAUGHN: Governor --
ROMNEY: And that's why he's not going to be reelected.
VAUGHN: Governor, what happens if you don't raise it? What happens then? Is it OK not to?
ROMNEY: Well, what happens if we continue to spend time and time again, year and year again more money than we take in?
What we say to America is: at some point, you hit a wall. At some point, people around the world say, "I'm not going to keep loaning money to America to pay these massive deficits pay for them because America can't pay them back and the dollar is not worth anything anymore." In that circumstance, we saddled our future -- the future of our kids in a way that is just unacceptable.
And so, you're going to see Republicans stand up and say, "Mr. President, lay down plans to balance this budget." If he does so, if we gets Democrats to come at that time table and honestly deal with the challenges we have, with the entitlement challenges, with the spending and discretionary accounts, with our jobs issues, and finally say you know what? We really can't afford another trillion dollars of Obamacare.
Iowa Debate
In August of 2011, Governor Romney participated in the Republican debate in Ames, Iowa. He spoke about a number of steps that he would take to fix the economy.
BAIER: You -- Governor Romney, you mentioned leadership on the economy. You are the front-runner in this GOP field, yet when it came to weighing in on the debt ceiling deal in Congress, something that had a major impact on the economy, many on this stage say you were missing in action. Some columnists even said you were in the "Mittness Protection Program." (LAUGHTER)
Then just hours before the House voted, you released a statement saying you could not support the bill. Is that leadership?
ROMNEY: You know, this is a critical issue, which is, how big is the government going to be? Back in the days of John F. Kennedy, the federal government took up, along with the state and local governments, 27 percent of the economy. Today, government consumes 37 percent of the economy. We're inches away from no longer having a free economy.
And so this is a critical issue. And, therefore, well before the debate got pushed along, I signed a pledge saying I would not raise the debt ceiling unless we had "cut, cap and balance." And that is the view I took on June 30th, and I reiterated that throughout the process, and, frankly, all the way to the very end.
BAIER: Just so everyone knows, when candidates go over the allotted time, they've agreed to this system. That's what you hear, the bell. And we'll try to not ring the bell that much. It's not the doorbell.
So to be clear -- and just to be clear here -- you echoed Congresswoman Bachmann and Congressman Paul in being against that final compromise deal. So to phrase it another way, if you were president, you would have vetoed that bill?
ROMNEY: Look, I'm not going to eat Barack Obama's dog food, all right? What he served up was not what I would have done if I'd had been president of the United States. If -- if I'd have -- if I'd have been...
BAIER: I know, but that bill was the deal on the table, Governor.
ROMNEY: If I'd have been -- well, I'm not -- I'm not president now, though I'd like to have been. If I were president, what I would have done is cut federal spending, capped federal spending as a percentage of the total economy, and then worked for a balanced budget amendment. If we do that, then we can rein back the scale of government. And that's the right thing to do. And that's what I said is the -- and June 30th.
TEA Party Debate
In September of 2011, Governor Romney participated in the TEA party debate for the Republican primary. He notes his support for a cut, cap, and balance plan.
BLITZER: OK. Just want to be precise on that, Governor.
Governor Romney, what about you?
ROMNEY: I wouldn't repeal it. I'd reform Medicare and reform Medicaid and reform Social Security to get them on a sustainable basis, not for current retirees, but for those in their 20s and 30s and early 50s.
But the key to balancing the budget -- and we talk about all the waste in government and the inefficiency. And having spent 25 years in business, I know something about taking waste out of enterprises. I'd love to do that to the federal government. And there is massive waste.
But we're not going to balance the budget just by pretending that all -- all we have to do is take out the waste. We're going to have to cut spending. And I'm in favor of cutting spending, capping federal spending as a percentage of GDP, at 20 percent or less, and having a balanced budget amendment. That's essential to rein in the scale of the federal government.
And there's a second part to balancing the budget, and that's growing the economy again. And that's why I laid out a plan to restructure the foundation of America's economy to start creating jobs again so people are paying taxes, businesses are paying taxes, not because we're raising the rates, but because we're growing the economy.
The right answer for America is to stop the growth of the federal government and to start the growth of the private sector.
CBS Foreign Policy Debate
In November of 2011, Governor Romney participated in the CBS foreign policy debate. He was asked about spending limits and he discusses his plan to cap spending at 20%.
Jim Demint: Thank you. And thank you all for being in South Carolina tonight. Federal spending and debt are not only our greatest economic problems, they're our largest national security problem. Yet the president and the Congress continue to spend and borrow at record levels. Just adjusting the spending on existing federal programs will not solve the problem. What federal functions will you eliminate or return to the states in order to balance our budget?
Major Garrett: Governor Romney, to you, sir.Mitt Romney: Absolutely. Right now, we're spending about 25 percent of the economy at the federal level. And that has to be brought down to a cap of 20 percent. I'll get that done within my first term, if I'm lucky enough to get elected. How do you do that?
One, it's eliminating programs. A lot of programs we like, but we simply can't afford. The first we will eliminate, however, we're happy to get rid of. That's Obama Care. And that'll save us $95 billion a year by my fourth year.
Other programs we like: the Endowment for the-- for Humanities, the National Endowment for-- for the Arts-- Public Broadcasting. These are wonderful-- features that we-- we have of the government. But we simply can't go out and borrow money from China to pay for them. They're not that essential.
In terms of returning programs to the states: Medicaid, a program for the poor, should be returned to the states. Let the states manage it. And if we grow it, at inflation plus one percent, we'll save $100 billion a year by returning that to the states. And finally, we have to make the federal government more productive. It is just way too over-- over-burdened with-- with excessive personnel. I'll reduce the personnel by at least ten percent, and link the pay of federal employees with the pay in the private sector. We should not pay government workers more than the people--
Major Garrett: Governor Romney, that's time.
Mitt Romney: --of America were paying for it.
2012 Campaign Website Statements
FISCAL RESPONSIBILITY
The mission to restore America begins with getting our fiscal house in order. President Obama has put our nation on an unsustainable course. Spending is out of control. Yearly deficits are massive. And unless we curb Washington’s appetite for spending, the national debt will grow to the size of our entire economy this year.
As President, Mitt Romney will cut federal spending and bring much-needed reforms to entitlement programs. Mitt will work toward balancing the budget, reducing the size and reach of the federal government, and returning power to states and the people.
ENTITLEMENT SPENDING
Reform entitlement programs to keep them solvent and put America on a path to prosperity.
Federal spending on entitlement programs like Medicaid, Medicare, and Social Security has not only spiraled out of control, but has placed their very solvency in danger. Unfortunately, President Obama has failed in his fundamental responsibility to articulate a serious vision and plan for the future of these programs. At present, the total cost of U.S. entitlement programs accounts for more than half of all federal spending. Combined with interest payments on the national debt, so-called “mandatory” spending is over 60 percent of all federal spending.Many of our fellow citizens have no idea that our growing entitlement spending has created a looming crisis. This is because politicians have a habit of hiding our country’s long-term liabilities. Mitt Romney believes that the federal government should publish a balance sheet each year—just as it requires public companies to do—so that Americans can understand the burden that future entitlement spending will place on our budget and economy. Over the course of his campaign, Mitt will propose the specific steps he will take as President to ensure the long-term solvency of Medicare and Social Security. While reforms are needed, Mitt also believes that these changes should not reduce benefits for current seniors or break the promises they have relied upon for their economic security in retirement.
Mitt knows that our economic future—along with the future of entitlement programs—depends on fundamental reform. If we wisely begin to reform entitlements and commit to live within our means, we can bestow on the next generation an America that is stronger and even more prosperous than the one we know today.
END DEFICIT SPENDING
Exercise fiscal responsibility to restore economic opportunity.
Washington is addicted to deficit spending. As President, Mitt Romney will cut spending to finally move our nation toward a balanced budget.
During the Bush years, the nation’s deficit—the gap between what Washington collects and spends each year—hovered between 2 percent and 4 percent of GDP. These levels were already problematic and a cause for concern. During the Obama administration, however, the deficit exploded to 10 percent of GDP.
One major problem with sky-high deficit spending is that it necessarily leads to another practice that undermines the nation’s fiscal foundation: borrowing unhealthy sums to pay for what we already cannot afford. America is on an unsustainable path that, within just a few short years, will cripple the economy and foreclose any opportunity for recovery.
Mitt Romney will bring fiscal restraint to Washington by placing a hard cap on federal spending to force our government to live within its means and put an end to deficit spending.
Mitt will also curb federal spending by repealing Obamacare, the federal takeover of health care that is scheduled to cost taxpayers one trillion dollars over the next ten years. He will also focus on eliminating wasteful government spending and right-sizing the federal government to save taxpayer dollars.
Mitt Romney’s goal is to put the federal government on a course toward a balanced budget and true fiscal responsibility.
