President Obama spent much of his recent stay in Colorado talking about how to rebuild the middle class — a worthy goal, of course, given high unemployment and stagnating wages.
But it so happens that the single most urgent economic issue in the United States over which the president and Congress have control — and the issue that also happens to be the most dire threat to the long-term welfare of all Americans — is the growing national debt. And yet the president’s approach to the budget has been notably superficial.
Meanwhile, although Mitt Romney talks much more about the ballooning debt, his prescription is as lopsided as the president’s.
But let’s deal with the president first. He gives the impression, in both public appearances and in his campaign ads, that the deficit and debt can be reduced if we just “ask the wealthiest Americans to pay a little more.” Heck, he’s even going to lower taxes on the middle class, he says.
Really? Just to cite one example of why such a promise is probably not sustainable: The middle class benefits from the payroll tax cut enacted during the recession to boost the economy. And yet surely that tax is going to have to be restored to its original level someday.
Meanwhile, any serious discussion of the deficit has to admit that slowing the trajectory of entitlement spending and cutting spending elsewhere will affect the middle class. Otherwise, there’s no way to get the sort of budgetary benefit so needed.
Romney may not have the appetite for spending that Obama has — Romney supports Paul Ryan’s proposed reform of entitlements, after all — but the candidate’s deficit plan is critically deficient nevertheless.
Like Obama, Romney pledges to cut taxes for the middle class, but as part of a package to cut every tax bracket by 20 percent.
That might not be such a problem if Romney were committed to tax reform that did away with enough deductions and credits to result in an overall boost of revenue. The deficit reduction plan proposed two years ago by Erskine Bowles and Alan Simpson managed such a feat.
But that’s not what Romney proposes. He wants to reform the tax code in order to offset the income tax rate cuts and thus keep his overall tax plan revenue neutral.
Sorry, but any serious deficit reduction plan requires new revenue too. And as Bowles explained Friday in The Washington Post, the debt commission was able to locate “more than $1 trillion of the $4 trillion needed in deficit reduction” through tax reform alone — without higher rates.
“America will turn the corner on its debt only if Republicans and Democrats come together to support a balanced deficit-reduction plan,” Bowles added. “For the numbers to work, both parties need to put aside partisanship.”
But they won’t if their leading candidates refuse to.
