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GOP Economy: Mitt Romney's economic plan

Republican presidential candidate and former Governor Mitt Romney speaks at the Fairfax County Republican Committee headquarters in Fairfax, Va.

Home state: Massachusetts

Economic Plan: Former Massachusetts Gov. Mitt Romney lays out his economic platform in a 59-point pamphlet that promises a combination of tax cuts, spending cuts and a scaling back of regulations on business. “When the price of doing business in America rises, it does not come as a surprise that entrepreneurs and enterprises cut back, let employees go, and delay hiring,” he writes on his website. While he advocates for an eventual overhaul of the tax code, his proposals are less radical than Rick Perry’s flat tax or Herman Cain’s 9-9-9 plan. Conservative group Club for Growth calls Romney’s tax record “mixed.”  Tax economist Alan Auerbach at the University of California, Berkeley, calls it “more realistic than Cain’s or Perry’s in terms of what might be plausibly adopted.” Romney’s plan calls for the repeal and replacement of President Barack Obama’s health care overhaul and the Dodd-Frank financial reform law.  Romney faces the challenge of not only distancing himself from his own health care policy in Massachusetts, but also proposing realistic alternatives to the regulations put in place.

Defense: Romney has vehemently argued against cuts to military spending. He argues for a defense spending floor of 4 percent of Gross Domestic Product. In his first 100 days in office, he promises, he would “put our Navy on the path to increase its shipbuilding rate from nine per year to approximately 15 per year.” He has also promised increased spending on missile defense. His foreign policy platform includes clear support of Israel and opposition to “any extension of Iranian or Jihadist influence” to come out of the Arab Spring.

Education: Romney does not go into detail about his education policy in either his 59-point plan or on his website, but he does say that an educated workforce is important to the economy.

Housing: The Romney campaign has lambasted the Obama administration for not fixing the housing crisis.  Ahead of Obama’s recent visit to Las Vegas, he released a video featuring homeowners suffering in Nevada, where the foreclosure rate is the highest in the nation, saying “Welcome to Nevada.” Still, Romney has advocated a hands-off policy toward housing, saying the government should allow the housing market to run its course and “hit the bottom.”

Health care: Romney wants to repeal the Obama health care package and replace it with a “market-driven system.” He says that he will immediately pave the way for state waivers from the law.   Instead, he proposes taking health insurance subsidies for employers and expanding them to individuals.

Romney is in an odd position because his own health care policy in Massachusetts closely resembles the “individual mandate” in Obama’s law that requires virtually all Americans to purchase health insurance.

In a speech to the conservative American Enterprise Institute, Romney proposed a voucher program to partially privatize Medicare. He said this would allow market forces to drive down costs. Stanford political science professor Terry Moe argues that allowing the market to take control is not a solution, because “insurance is a classic area within economics as an example of market failure.”

Social Security: Romney lumps Social Security with Medicaid and Medicare as entitlement programs that are necessary for economic security but need reform to remain solvent. His plan presents “options” such as raising the eligibility age, reducing benefits for high-income retirees, and raising payroll tax revenue.  Romney’s ideas for entitlement reform reflect many recommendations from the Bowles-Simpson debt reduction commission.

The National Debt: Romney endorses cutting federal spending and capping it at 20 percent of GDP. He also supports a balanced budget amendment. That would constitutionally require Congress to pass a balanced budget, with exceptions for “national security emergencies.” He supports overhauls of entitlement programs such as Medicare and Medicaid, using Rep. Paul Ryan’s budget plan as a basis.

Taxes: As part of Romney’s “Job One, Day One” plan, he promises to cut the corporate tax rate from 35 percent to 25 percent, which some think would encourage businesses to hire more workers in the United States. He would preserve tax cuts signed into law by George W. Bush and eliminate the capital gains tax and the estate tax. He calls the current tax code too complex and backs a long-term simplification by closing loopholes and creating a flatter personal income tax system.

About the author

Ryan Faughnder is a web contributor for Marketplace. Most recently, he was a business reporting intern for the Los Angeles Times and a senior editor at Neon Tommy.

Republican presidential candidate and former Governor Mitt Romney speaks at the Fairfax County Republican Committee headquarters in Fairfax, Va.

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