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Romney's Strange Notion of "Sacrifice"

By now, you may have heard about Mitt Romney's Detroit speech and what he said about the family cars. In what I can only assume was an overzealous attempt to prove his loyalty to the American auto industry, he boasted that he had a Ford Mustang and a Chevy pickup truck – and that “Ann drives a couple of Cadillacs actually.” Yes, that’s quite a lot of automobile for one couple. And, yes, it will remind a lot of people about how little Romney has in common with them.

Still, that wasn’t the statement from Romney’s appearance that stuck with me. Instead, it was something from the prepared text: Romney’s riff on “sacrifice.” The focus of Romney’s speech was economic policy, including his plan for the federal budget. And that plan involves cuts to a lot of programs. According to Romney, a willingness to make those cuts is a sign of political bravery, a quality President Obama lacks.

My plan for America requires real leadership. And it calls for sacrifice. It doesn’t require a leader to promise bigger and bigger benefits, and something for nothing. Let me underscore that. It doesn’t require a leader to promise bigger and bigger benefits, and free stuff. It requires a leader ... to call for sacrifice.

It's true: Romney’s plan does call for sacrifice. But look who would do the sacrificing.

Romney’s budget proposal has a couple of moving pieces, but the key components are a promise to cut taxes and a promise to cut spending. Earlier this week, he offered some details about the tax cut he has in mind, calling for a 20 percent reduction in taxes for everybody. That may sound equitable, but the rich pay a much larger share in taxes. As a result, they would gain a much larger share of the benefits. And while nobody has had time to analyze Romney’s specific proposal, the Tax Policy Center has previously evaluated plans for across-the-board 20 percent income tax cuts. The result, as Pat Garofalo of Think Progress reminds us, would be a windfall for the wealthy: Nearly half the benefits would go the richest 5 percent of Americans and more than a quarter would go the richest 1 percent.

So that’s the tax piece. And the spending piece? We knew that part already: Romney has pledged to cap federal spending at 20 percent of gross domestic product, while reserving 4 percent of GDP for defense spending. The result, as the Center on Budget and Policy Priorities has pointed out, would be massive cuts to programs that would be larger than even the ones the House Budget Committee, under Paul Ryan, approved.

In the speech, Romney suggested that he’d protect the needy and preserve important programs – that, in the near term, he’d hit his targets by eliminating programs like Amtrak funding and handing safety net programs over to the states. But, as Ezra Klein rightly notes, it’s that second part, the cuts to safety net programs, where Romney would have to get the big savings. And, to do that, he’d have to decimate the programs.

The story with Medicaid is particularly telling. Even if you believe that turning Medicaid over to the states would result in substantial new efficiencies – and there’s no good reason to believe that – people who depend on the program would suffer, given the magnitude of the spending reductions Romney has in mind. I’m not just talking about the children and their parents who now depend on the program for basic health insurance. I’m also talking about the elderly and disabled who depend on the program to fill the gaps in Medicare and cover the costs of long-term care, including nursing homes. (For more on Medicaid spending, see this excellent post by Aaron Carroll.)

And that’s just for the immediate future. In his speech, Romney made clear that, like Paul Ryan, he intends to transform Medicare into a voucher program, starting in 2022. He hasn’t specified how big the vouchers would be but, again, it’s unlikely he could achieve the savings he has in mind without reducing the value of the vouchers to the point where significant numbers of seniors could not get the care they need.

Romney would do a few other things, like freeze federal pay, and he counts on economic growth from his tax cut to make the budget balancing easier. Most economists I know don't think the math adds up, but leave that aside. Even if you accept Romney's assumptions, the end result is the same: The rich would benefit disproportionately from the tax cuts, because they pay more in taxes. The non-rich would suffer disproportionately from the spending cuts, because they depend more on public programs.

Sacrifice? You bet. Except for the folks with a couple of Cadillacs.

Update: I originally started this item by talking about Romney's inability to fill Ford Field, the awful visuals that produced, and the campaign's apparently poor advance work. But officials at the Detroit Economic Club, which hosted the speech, say that the campaign had to move the speech from an auditorium within the facility and onto the field itself because of security concerns. I take those concerns seriously, so I've removed the reference, along with my snide comments about the campaign's poor planning (for which I apologize).