Mitt Romney wants to be the next president of a country in need of serious and sweeping economic reform. And here are the first two points in his 59-point economic plan:
1. Maintain current tax rates on personal income
2. Maintain current tax rates on interest, dividends, and capital gains
Now imagine private-equity boss Romney back at Bain Capital sitting down to read his team’s 59-point turnaround plan for some troubled widget maker. And imagine if the first two action items started with the phrase “Maintain current ….”
Romney probably wouldn’t bother reading any further before tossing the report in the trash, calling a meeting, and cracking heads. Heck, if Private Equity Romney were called in to turn around Romney Campaign Inc., axing CEO Romney might be the first move on his to-do list—especially after looking at last night’s numbers from Colorado, Minnesota, and Missouri.
Romney needs to give conservatives, and voters in general, a much clearer picture of the sort of conservative governance President Romney would strive for. Exactly how would Mr. Fix-it fix America? Here’s how he can do it:
– Stress entitlement reform and keep stressing it. Romney has embraced the broad outlines of a Paul Ryan-style Medicare overhaul which would reform the program into a premium support system for younger Americans. As for Social Security, Romney would raise the eligibility age and alter the way benefits are indexed to inflation for high-income retirees. Good stuff.
But guess what? Neither plan is one of his 59 points. Nor can either be easily found on his web site. And in his speeches after winning the New Hampshire and Florida primaries and Nevada caucus, there wasn’t one mention of entitlements, Medicare, or Social Security. These programs are at the very heart of America’s long-term debt problem and thus should be at the heart of Romney’s campaign.
– Specify which federal programs he would cut. Romney’s op-ed today in USA Today is a perfect example of what turns off Tea Party GOPers. He says he’ll cap spending at 20 percent of GDP by 2016, which will require between $400 billion and $500 billion in cuts. And what’s going to get cut, exactly? Well, he wants to trim non-security discretionary spending by 5 percent across the board and then cap it below 2008 levels. On his website, Romney talks about eliminating or scaling back “a wide range of programs, from Amtrak to the National Endowments for the Arts and Humanities.” Another $50 billion would come from reducing waste, fraud, and abuse. And $50 billion more from shrinking the federal workforce and its compensation.
That’s all fine, but Romney should mimic Senator Tom Coburn, who last summer released a 600-page plan to cut spending by $8 trillion over the next decade. Coburn didn’t just wave a Lean Six Sigma magic wand over the budget to make the red ink go away. He went over the federal budget line by line to identify and exorcise wasteful, duplicative, or unnecessary programs. He treated it the way a private equity firm would a floundering rust-belt manufacturer or overbudget Olympic Games.
– Get a tax reform plan worthy of the name. In his USA Today piece, Romney again said he would “pursue fundamental tax reform that makes our system simpler, flatter and fairer.” When are we going to get some details on this, first term or second term? Faster, please. Washington is full of tax reform plans. Just steal one and tweak it a bit. There’s the Bowles-Simpson plan which would get rid of all tax breaks and lower the top rate to 23 percent. Jon Huntsman stole it and then modified it by getting rid of investment taxes. That would be a great option for Romney, too. Call it the Entrepreneur First option and stress how it would boost growth, income, and jobs.
Or Romney could go with the Family First option. Under a plan created by conservative economist Robert Stein, rejiggering tax rates and tax credits would create a system where middle-income families with kids under 18 would pay substantially less in taxes while high-income workers and upper-middle-income taxpayers who do not have children in the home would pay more. Stein would also eliminate the double taxation of corporate income and cut the effective tax rate on capital investment.
– Push education reform. Romney thinks in terms of “human capital” and creating a “21st century workforce.” Mostly, this involves enhanced worker retraining and more high-skill immigration. But fixing K-12 must be a core element, too. Washington should support in every way it can—even if that just means getting out of the way—the introduction of market forces and accountability. Oh, and it also means lending support, if only from the bully pulpit, to governors battling teachers unions. Just about every conservative who’s seen Waiting for Superman now views depowering teachers unions as a moral imperative, even more than a fiscal one. Does Romney?
– Both shrink and expand the 59-point plan. Romney needs to focus on a few key policies and hammer them over and over again. Rinse and repeat, just like Herman Cain did with his 9-9-9 plan. At the same time, he should greatly enlarge his 160-page economic outline into something more like the 500-page analysis of the U.S. economy published last year by venture capital firm Kleiner Perkins Caufield Byers. Its fantastic, chart-heavy USA Inc. report—the cover of which I reproduced above—treats America like a corporation and analyzes it like an investment firm would.
Even the most capable Mr. Fix-it needs a blueprint. And if more conservatives knew what Romney’s was, they might be more willing to lend a hand.