The Most Important Differences Between Romney And Obama's Plans For The Budget


Photo: Flickr/Gage Skidmore

Reporters don’t get admission into the innermost important workings of a Presidential campaign until the historians do – if ever – but on some rare occasions there are exceptions to this rule, and now seems to be one, at least of a certain kind.On Wednesday, we learned that Mitt Romney didn’t know that his budget plan is importantly different from the Ryan plan that he had previously endorsed. Not only this, but he didn’t know that his health-care plan is also importantly different.

Here is how these facts came to light:

Yesterday, Brit Hume of Fox News (normally the safest news-medium for rolling out a new Republican nominee) asked Ryan, “The budget plan that you are now supporting would get to balance when?”

Ryan answered: “Well, there are different – The budget plan that Mitt Romney is supporting gets us down to 20% of GDP government spending by 2016. …”

Hume said, “I get that, but what about balance?”

Ryan replied: “Well, I don’t know exactly when it balances, because we haven’t – I won’t get wonky on you, but – we haven’t run the numbers on that specific plan. …”

Hume now (admirably, and rare for a reporter in the major media) asked a follow-up to his follow-up: “I understand that, but, but your own budget that you, that you, I’m talking about the House budget, I mean this is, this is your budget. …”

Ryan answered: “The House budget doesn’t get to budget [he meant ‘balance’] until the 2030s. …”

One reason why the differences between those two budgets are important had become evident just the day before, on the 14th, in three terrific news reports at the definitive site for “policy-wonk” news.

Ezra Klein bannered “Paul Ryan’s Budget Keeps Obama’s Medicare Cuts. Full Stop.” He reported here that the Romney campaign had just now promised “A Romney-Ryan Administration will restore the [$700 billion+] funding cuts to Medicare.” Klein then headlined a few hours later, “Romney’s Budget Plan Is a Fantasy,” and he explained why (in his usual wonkish way).

This is what it comes down to: In order for Romney to keep his basic promise that “By 2016, federal spending will be below 20 per cent of GDP,” and yet eliminate the $700 billion+ in cuts to Medicare spending that are in both the Obama and the Ryan budget plans (or in other words, to add back that $700 billion+ which he had formerly intended to cut), “Romney will have to cut federal spending by between $6 and $7 trillion over the next decade,” which would mean that, “by his third year in office, every single federal program that is not Medicare, Social Security, or defence, will be cut, on average, by 40 per cent.

That means Medicaid, infrastructure, education, food safety, road safety, the postal service, basic research, foreign aid, housing subsidies, food stamps, the Census, Pell grants, the Patent and Trademark Office, the FDA, and lots more.

Obviously, as word gets out about this, the Romney campaign will implode. They must be very worried about this.

As for regular Americans, we need to understand what the real issue for us is here, between the Obama plan and the Romney plan. This will now be briefly described, with a bit of the essential historical background.

When the Medicare Part D plan was added to Medicare by Bush and congressional Republicans in November 2003, it was projected to cost $395 billion over 10 years, but the Bush Administration knew that this was a lie and issued the projection only in order to be able to swing the bill’s passage. On 11 March 2004, Tony Pugh of Knight Ridder Newspapers headlined “Bush Administration Ordered Medicare Plan Cost Estimates Withheld,” and he opened: “The government’s top expert on Medicare costs [Richard S. Foster] was warned that he would be fired if he told key lawmakers about a series of Bush administration cost estimates that could have torpedoed congressional passage of the White House-backed Medicare prescription-drug plan.”

Then, on 9 February 2005, the White House re-estimated what this legislation would cost the federal Government over 10 years: $720 billion. However, a more trustworthy cost-estimate had just shortly before been issued by the Congressional Budget Office: $800 billion. In other words: The legislation added $800 billion, instead of $400 billion, to the expense side of the federal budget. This was done by the lawmakers who passed it, in order to win political contributions and thus re-election, or else to win lucrative corporate board seats or lobbying posts.

This legislation had itself been passed due to enormous lobbying by the drug companies, insurance companies, and the many other corporate beneficiaries, and its passage entailed soaring additional expenses by the Federal Government, to those very companies. These added federal expenditures boosted all of those companies on Wall Street, and so boosted the pay to these companies’ top executives, which is why those men were paying from their corporate coffers for such an enormous lobbying operation, in order to pass it.

Now, however, the bill to taxpayers on all of that is coming due, and Obama and Romney have different ways of dealing with that problem.

The Obama Administration, being Democrats, aren’t favourably inclined to continuation of those corporate subsidies. (This was Republican legislation, to privatize Medicare and so boost Republican contributors. Only 16 of the 205 Democrats in the House voted for it on 22 November 2003, and only 11 of 45 Democrats in the Senate joined them three days later to pass what had by then become clearly an inevitability, because of the solid Republican support. And those Democrats were the most conservative ones, who joined this near unanimity of Republicans.) Thus, the Obama plan reduces Medicare Part D, and saves a ton of federal money.

Romney, to the extent that he has talked at all about his plans after abolishing Obamacare, has described massive further privatization of U.S. health-care. The Ryan plan likewise privatizes it, and it additionally specifies approximately the same expenditure-cuts to Medicare as does the Obama plan. Consequently, the question for voters is how those expenditure-cuts would be applied by the two plans.

The Obama plan specifies cuts in expenses due to requirements for providers to use what scientific studies show to be the best practices, and due to a requirement that no more than 20% of federal healthcare expenses will go toward anything else than actual benefits (healthcare) to patients; a 20%-maximum will go toward corporate profits, administration, advertising, and the like, but all the rest (80%+) will go to pay only for patient-care.

The Ryan plan instead cuts the benefits to patients. It does this by a circuitous route – replacing benefit-guarantees with insurance-vouchers – and so making the benefit-cuts seem palatable.

Romney now needs to choose. Any choice he makes, at this stage, will obviously be profoundly damaging to his campaign.

Megan McCardle, at The Atlantic on 23 December 2009, headlined “So Does the Health Care Bill Reduce the Deficit After All?” and she noted that, “if the bill is implemented as written [which it was], then under the CBO scoring model, it will reduce the deficit by $132 billion over 10 years.” The question now is: Should it be rescinded? Romney says yes. (Republicans deny the validity of that CBO study.)

The voters will have a clear choice. On the one hand will be the largest campaign spending in history, thanks to the Republican judges on the U.S. Supreme Court ruling in the 2010 Citizens United case that money is “speech” and that corporations have an unlimited “free speech” right. On the other hand will be the facts. Now the facts are leaking out (perhaps despite Citizens United). It will be an interesting election.

Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

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