"I agree with the view that the only feasible way to make sufficient cuts in the deficit to stabilize the debt-to-GDP ratio is through a combination of spending cuts and tax increases," says Nigel Gault, chief U.S. economist at IHS Global Insight. "A President Romney might initially try to do it only via spending cuts but either he or his successor would eventually have to raise taxes," he adds.
For more on the Republican primary, see
Ron Paul's Wall Street support
and what recent jobs data
says about Obama's re-election chances
Cautious to conjure the free enterprise message of his hero Reagan without committing to what may be a losing mix of tax and debt cuts, Romney has dodged promises to reduce or eliminate the debt.
"[President Obama] raised the national debt. I will cut, cap, and balance the budget," said Romney after winning the New Hampshire primary. A high rhetorical moment of his campaign, the statement can be parsed several different ways. After all, Romney didn't say he would cut the national debt, which could grow during his presidency even if he were to balance the budget by 2016.
Nevertheless, Romney wants you to believe he'll tackle the national debt - he even said so. "How I'll tackle spending, debt," was the headline of a
Op-Ed that Romney wrote in November, just as the primary campaign heated up. In the article, Romney highlighted cutting the federal budget to below 20% of GDP - $500 billion in spending cuts by 2016 - all of which would come in discretionary areas like "ObamaCare" and Amtrak subsidies, not to the military or current social security beneficiaries, the two biggest pieces of the budget.
Meanwhile, Romney's committed to maintain the Bush tax cuts and even hinted at cutting the top marginal tax rate from 35% to as low as 20% in January debates. He doesn't stop there. Romney's plan goes on to further say that he would seek to eliminate taxes on capital gains, dividends and interest for any taxpayer who makes less than $200,000 a year.
Extending the Bush tax cuts will cost the government $5.4 trillion in revenue in the next decade keeping deficits in the $1 trillion neighborhood, according to January estimates from the
Congressional Budget Office
. The report also showed that the deficit could fall to $200 billion if those cuts were to lapse. In his State of the Union Address, President Obama committed to ending the tax cuts for the wealthiest 2% of Americans, in a push to guarantee a 30% tax rate for those earning $1 million or more titled "the Buffett Rule."