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February 24, 2012

GOP Contenders Policies Would Raise US Debt: Study

by Mil Arcega

An independent analysis shows the U.S. national debt would grow under tax policies proposed by all four Republican candidates running for president.  And of the four, only one comes close to balancing the budget.

 

Ask any of the Republican presidential hopefuls and they'll tell you the current president has done more harm than good.  

ROMNEY: "Almost everything he's done has made it harder for this economy to reboot."

GINGRICH: "I want to create a springboard in which people who are poor get educated, get a job, learn how to work, get a better job and someday own the company."

But an independent study commissioned by the non-partisan Committee for a Responsible Federal Budget says fixing the U.S. economy will not be easy.

Former Republican Congressman Bill Frenzel with the committee's U.S. Budget Watch project says economic policies championed by the four contenders, need more work.

"None of the primary 'promisers' on the Republican side get us to a balanced budget in 10 years, even in the most optimistic estimates," said Frenzel.

With no change to U.S. policy, by 2021, the committee says national debt, now nearly $15 trillion, will represent 85 percent of the nation's gross domestic output.  By comparison, Greece's debt before its second bailout was 160 percent of its GDP.  

Instead of stabilizing the debt, CRFB president Maya MacGuineas says Republican campaign platforms would add to it, some more than others.

"Under Gingrich's proposals, the debt would increase by $7 trillion compared to that amount and the debt levels would reach 114 percent of GDP," said MacGuineas.

The study, based on specific candidate proposals, shows Congressman Ron Paul's policies would reduce debt by $2.2 trillion. But the study says Paul's plan offsets proposed tax cuts by eliminating prominent government agencies, including the Federal Reserve.

Mitt Romney's blueprint would add $250 billion to the debt, while Rick Santorum's tax cuts would add $4.5 trillion.

Analysts say the accounting problem stems from Republican aversion to new taxes. Former Congressional Budget Office Director Alice Rivlin says the analysis shows a more balanced approach is needed.

"I think it is totally unrealistic that we can stabilize the debt over the long term without both increases in revenues and reductions in entitlements," said Rivlin.

U.S. Budget Watch expects Republican candidates will dispute the group's findings. But the group welcomes the dialogue if it brings more transparency and compromise. The group says it plans to release a separate analysis of President Obama's economic agenda.