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Report: Romney's tax plan could lead to a loss of nearly 2 million jobs by 2014

Posted by on Oct. 8, 2012 at 10:06 PM
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Even with all the noise going on in the Middle East and conversations about social issues like abortion and same-sex marriage, the upcoming election will still be decided over the economy. While Mitt Romney has been a successful businessman, his policies wouldn't put the country on the right track.

Following typical Republican logic, Mitt Romney has campaigned on promises of "tax cuts" and "rolling back regulations," somethingPresident Obama has pushed back against on the campaign trail. When President Obama released his economic plan, "The American Jobs Act," it was promised to create nearly 2 million jobs, 1 million of those jobs would be created 2013 alone. With a Republican controlled congress, the American Jobs Act was never able to it to the president's desk.According to a new study by the Economic Policy Institute, President Obama's budget would lead massive economic growth.

"The budget plans put forward by Barack Obama would lead to increased employment of about 1.1 million jobs in 2013 and 280,000 jobs in 2014, relative to current policy. The Obama employment gains would be driven by an increase in spending of $135 billion over the current policy baseline, which is the result of $142 billion in temporary spending under his proposed American Jobs Act."

In contrast to President Obama, Mitt Romney's economic plan would result in a loss of hundreds of thousands of dollars. The Economic Policy Institute notes that the Romney budget would create 87,000 jobs in 2013, but have a negative effect the following year, resulting in a loss of 641,000 jobs in 2014. While those numbers are devastating, the study notes that if the promised individual income tax cuts were revenue-neutral, the Romney plan would lead to a loss of nearly 2 million jobs by the end of 2014.

"If some of Romney’s proposed individual income tax cuts were revenue-neutral (he has said that they would be, but has not specified what “base-broadening” adjustments he would make to the tax code to accomplish that), his plans would instead lead to employment losses of 608,000 in 2013 and roughly 1.3 million in 2014. The weaker job growth and outright job losses under the Romney plan are driven by his proposal to cap government spending at 20 percent of gross domestic product (GDP), a move that implies very large cuts to overall spending."

While Romney wants to cap government spending at 20 percent, he also plans on increasing the defense budget and offer tax breaks, primarily for the wealthy. In order to try to make his number's work, Romney would have to make drastic cuts to social programs like Medicaid, Medicare and Social Security while slashing the education budget. The Romney endorsed Ryan plan would cut over $800 billion out of Medicaid over the next decade and would cut $134 billion from the food stamp program, kicking off as many as 10 million people from the enrollment. The Washington Post's Ezra Klein called the Romney plan "a fantasy," attacking both proposals put out by Romney and Ryan.

"To make Romney’s numbers add up, you have to assume that by the end of his presidency, Romney will have cut every federal program that’s not Medicare, Social Security or defense spending by 57 percent. I don’t assume he’s going to do that. I assume Mitt Romney’s budget is a fantasy and it’s never going to happen."

With the election just over a month away and the first debate around the corner, Mitt Romney can't win the election by offering policy specifics. With their numbers dropping, Romney and Ryan can only cross their fingers and hope that their tired rhetoric will resonate with the American people.

by on Oct. 8, 2012 at 10:06 PM
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