BEYOND THE NUMBERS
As you may have heard, Mitt Romney said this morning, “I’m not concerned about the very poor. We have a safety net there. If it needs a repair, I’ll fix it.” We’re glad the governor is expressing support for a safety net and for fixing it if it needs repair. Yet his own budget proposals would tear gaping holes in the safety net and damage it severely. Consider the following:
- The Romney budget proposals would make massive cuts in safety-net programs. For starters, he has embraced the budget that House Budget Committee chairman Paul Ryan proposed last year, which would make the deepest cuts in assistance for low-income Americans in modern U.S. history. The Ryan budget would convert Medicaid to a block grant and cut its funding by 49 percent by 2030 below currently scheduled levels, a proposal that Governor Romney has specifically defended. It would also convert SNAP (formerly known as the Food Stamp Program) to a block grant and cut its funding by $127 billion (or almost 20 percent) over the next decade. These cuts, combined with deep cuts in Pell Grants, low-income housing assistance, and other programs for low-income people, would total a stunning $2.9 trillion over the next decade. The Ryan budget would get nearly two-thirds of its savings over the next ten years by cutting programs targeted on people with low or modest incomes, even though those programs account for only about one-fifth of the budget, making it the most regressive budget plan that a chamber of Congress has ever passed.
And the Romney proposals go farther than Rep. Ryan’s — they would lead to even deeper cuts in basic safety-net programs for the poor than the Ryan budget would. That’s because Governor Romney has proposed to: 1) shrink federal spending to 20 percent of GDP for 2016 and all subsequent years, which is a bit below what federal spending would fall to over the next two decades under Chairman Ryan’s budget; 2) increase defense spending to 4 percent of GDP, a higher level of spending than it would reach under the Ryan budget; 3) permanently extend President Bush’s tax cuts; 4) enact new tax cuts on top of them, which the Urban Institute-Brookings Institution Tax Policy Center estimates would lose an additional $180 billion a year by 2015; and 5) require that the federal budget be balanced.
Governor Romney hasn’t outlined cuts in specific programs. But if policymakers exempted Social Security, as he has suggested, they would have to cut all other nondefense programs — including safety-net programs for the poor — by an average of 24 percent in 2016 and 35 percent in 2021 just to reach Governor Romney’s first four goals. Furthermore, to balance the budget at the same time — which Governor Romney has said should be a constitutional requirement — policymakers would have to finance his tax cuts with even deeper budget cuts. To meet all of Governor Romney’s budget goals — including balancing the budget — would require cutting all nondefense programs other than Social Security by an average of 54 percent by 2021. And since policymakers surely wouldn’t cut Medicare in half by 2021, safety-net programs for the poor likely would be cut even more severely. The ensuing increase in poverty and destitution would almost certainly surpass anything in our country’s recent history.
- Even a cut of 24 percent — the smallest of the figures I’ve just mentioned — would have a devastating impact on safety-net programs. For example, the cuts in SNAP would throw almost 11 million low-income people off the program, cut benefits deeply — by over $1,500 a year for a family of four — or some combination of the two. Cuts of 24 percent in compensation payments for disabled veterans, which average less than $13,000 a year, would shrink those payments — as well as pensions for low-income veterans, which average about $11,000 a year — by nearly a fourth. Supplemental Security Income (SSI) benefits for the poorest elderly and disabled individuals in the country, which today lift impoverished elderly and disabled people living alone to only three-quarters of the poverty line, would be slashed — with these people pushed below 60 percent of the poverty line.
- And while cutting low-income programs, Governor Romney would actually raise taxes on low-income families. According to the Tax Policy Center, the Romney tax plan would provide big tax cuts at the top of the income scale that average $140,000 a year (on top of the Bush tax cuts) for people who make over $1 million a year. Yet it would increase average tax burdens for low- and moderate-income families. The plan would do so by letting certain tax measures that benefit low-income families expire at the end of 2012 — including measures that reduce marriage tax penalties on working-poor families and help low-income students afford college — even as it made permanent all of the expiring tax cuts for wealthy individuals and abolished the estate tax.