Posted on Tue, Sep. 06, 2011
last updated: March 15, 2013 11:57:47 AM
WASHINGTON — Mitt Romney offered a detailed blueprint Tuesday for boosting the nation's ailing economy, a plan full of familiar Republican ideas such as keeping tax rates low, peeling back federal regulations, spurring domestic energy production and repealing the 2010 health care overhaul.
The former Massachusetts governor was trying to position himself as the moderate-to-conservative alternative to President Barack Obama, but as Republican presidential candidates prepare to debate Wednesday night in Simi Valley, Calif., serious questions remain about whether Romney's effort to portray himself as the field's common-sense business executive will translate into broader support.
He also faces doubts about whether his economic ideas, many of which mirror proposals from the George W. Bush administration, will help create jobs. The nation's unemployment rate remained 9.1 percent last month, and on balance, no new jobs were created.
Romney would keep current individual tax rates intact, and provide more tax breaks for corporations and for middle- and lower-income consumers who save and invest.
The overarching philosophy is to give incentives for private industry to hire and invest. "The right course for America is to believe in growth. The right answer for America is not to grow government or believe government can create jobs," he said as he unveiled his plan during a speech in North Las Vegas, Nev.
Romney's economic plan is very much in the mainstream of conservative Republican thought. His economic policy team features two former chairmen of the Council of Economic Advisers under President George W. Bush — N. Gregory Mankiw and R. Glenn Hubbard, who wrote the plan's foreword — as well as former Minnesota Rep. Vin Weber and former Missouri Sen. Jim Talent. All are respected as serious pillars of the GOP establishment.
Economists warned that there's no simple answer to strengthening the economy.
"These measures are all fine to consider, but the main problem today is the $8 trillion loss in household wealth from the housing crash. None of these measures will address this key problem," said Michael Walden, an economics professor at North Carolina State University.
Romney's plan is an effort to manage a tough balancing act: Keep tea party conservatives, who are demanding dramatic cuts in spending and taxes, from mobilizing behind a single opponent. At the same time, he needs to maintain support among independent voters who could help him beat Obama.
"He wants to be seen as the alternative to Obama," said Andrew Smith, the director of the University of New Hampshire Survey Center.
Romney has a lot of competition from fellow Republicans.
Minnesota U.S. Rep. Michele Bachmann, a tax lawyer, is open to abolishing the corporate income tax and "deep-sixing our 3.8 million-word Internal Revenue Service code so companies can invest again."
Former Utah Gov. Jon Huntsman released a plan last week that would dramatically cut individual income tax rates, reduce the corporate tax rate from 35 to 25 percent and eliminate capital gains taxes.
Texas Gov. Rick Perry, who entered the race last month, promises a "pro-growth agenda combined with real spending reductions," while Texas U.S. Rep. Ron Paul has an extensive economic program that includes no more increases in the nation's debt limit, vetoes of any budget not in balance and "alternatives to the (Federal Reserve Board's) inflated paper money."
Romney tried to assuage the tea party crowd.
"The rise of the tea party is a classic instance of the self-correcting forces of American democracy in action," he says at one point in his proposal.
But tea party conservatives remain unenthusiastic about him.
Judson Phillips, Tea Party Nation founder, called Romney's proposals "a good start," but chuckled over their 59 specific ideas.
"Let's try to keep things simple," Phillips said. "Government is already too complicated. Romney's philosophy is that he's the best one to manage big government."
Romney listed 10 steps he'd take on day one as president. Among them: Begin to dismantle the federal health care law, eliminate Obama-era regulations that stifle economic growth, take steps to promote energy production, pressure China to end currency manipulation and overturn Obama-era executive orders that Romney says "tilt the playing field in favor of organized labor."
He'd maintain the Bush tax cuts, whose rates are scheduled to expire at the end of next year. Obama has backed raising the top two rates, now 33 and 35 percent, back to their pre-Bush levels of 36 and 39.6 percent.
Romney also would push for an immediate reduction in the corporate income tax rate — now 35 percent — to 25 percent.
His plan quickly came under fire from liberal groups. Pat Garofalo, economic policy editor at ThinkProgress.org, a liberal research group, noted that taxes are already at historically low levels. According to the federal Office of Management and Budget, government receipts last year and in 2009 were about 15 percent of the gross domestic product, the lowest levels relative to the economy in about 60 years.
Among other Romney proposals:
He'd ease regulatory burdens, saying he'd direct government agencies to end annual increases in regulatory costs. A study last September commissioned by the Small Business Administration estimated that the annual cost of federal regulations topped $1.75 billion in 2008.
Asked recently what regulations he'd eliminate, Romney mentioned those associated with the 2010 federal health care law.
Romney pledged deep budget cuts, echoing the plan by many congressional Republicans to cut discretionary spending by 5 percent. He'd restrict federal spending to 20 percent of the GDP; it's now running around 25 percent. He offered no figures on how much his plans would affect the national debt.
He'd turn Medicaid into a block-grant program run by states.
He was vague about Social Security and Medicare, which experts say must be addressed to curb future budget deficits. Romney said he'd "keep the promises made to our current retirees," but added "we should ensure that the promises that we make to younger generations are promises we can keep."
He floats the idea of raising the Social Security retirement age and changing how benefits are indexed to inflation for higher-income retirees.
On Medicare, he said the privatization plan that House Budget Committee Chairman Paul Ryan, R-Wis., offered earlier this year "makes important strides in the right direction by keeping the system solvent and introducing market-based dynamics."
But, Romney added, his own plan "will differ, but it will share those objectives." Under Ryan's plan, Medicare beneficiaries could choose from a variety of plans after 2022, and consumers would get a "premium support payment."
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