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WP: Romney's Fiscal Fantasy Plan

April 26, 2012


Lawrence Summers, former economic adviser to President Obama, critiques Mitt Romney's chief economic adviser Glenn Hubbard's recently published budget analysis, describing it as "imaginary."

Political arithmetic is always suspect, and one should always examine carefully the claims of those seeking votes. Smart observers have learned to distinguish between the claims of political candidates and their advisers and proposals that have been evaluated by independent scorekeepers such as the Congressional Budget Office (CBO).

This principle was aptly illustrated by the "budget analysis" Mitt Romney's chief economic adviser, Glenn Hubbard, recently put forward. In a Wall Street Journal op-ed this week, Hubbard constructs a budget plan that he imagines President Obama might propose someday, engages in a set of his own extrapolations and then makes assertions about it. He does not discuss the actual Obama plan or how it has been evaluated by the CBO. Nor does Hubbard invest his credibility in defending the claims that Romney has made about his own fiscal plans. He simply states that "Yes, President Obama and Mitt Romney have budgets with competing visions. But Gov. Romney's budget makes tough choices" — without delving into the specifics or trade-offs that Romney's "tough choices" entail.

The president put forward a planthis year that would reduce deficits by more than $4 trillion over the next decade. It would bring federal discretionary spending to its lowest levels since the 1960s. It includes $2.50 in spending cuts for every $1 in additional revenue. It also asks everyone to pay his or her fair share of taxes, repealing the Bush tax cuts for families making more than $250,000 a year and closing loopholes and shelters such as preferences for private jets, hedge fund managers and offshore investments.

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