Marcus: Romney’s policies would hurt poor

By Ruth Marcus, Columbian Syndicated Columnist

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photoRuth Marcus

"I'm concerned about the poor in this country,” Mitt Romney said the other day. “We have to make sure the safety net is strong and able to help those who can’t help themselves.” This fine sentiment doesn’t square with his actual policies. Consider Romney’s support for the budget plan crafted by Wisconsin Rep. Paul Ryan and passed by the Republican House. It would cut Medicaid spending by $700 billion over 10 years, reduce food stamps by $127 billion and cut in half the funding of Pell Grants for low-income college students.

As Fox News’ Chris Wallace usefully pointed out in an interview with Romney last month, “You would cut all of these programs, Governor, that people depend on, and a lot more than that.” Romney, in response, focused on his proposal for Medicaid. He would turn the program over to states and allow funding to grow at inflation plus one percentage point — significantly less than the historical growth of health care costs. “By doing that, you save an enormous amount of money,” Romney said. “I happen to believe that states can do a better job caring for their own poor, rooting out the fraud and waste and abuse that exists within those programs.” Wallace: “But you don’t think if you cut $700 billion in aid to the states that some people are going to get hurt?” Romney: “By cutting welfare spending dramatically, I don’t think we hurt the poor. In the same way, I think cutting Medicaid spending by having it go to the states, run more efficiently with less fraud I don’t think will hurt the people that depend on that program for their health care.”

Really? Reforming welfare to encourage work was a good idea, but for those who need temporary help, benefits are increasingly inadequate. Adjusting for inflation, benefits are now below the 1996 level in all but two states. And turning the program into a block grant has meant that states, reeling from the impact of the recession, have been unable to respond adequately to increased needs. That history is hardly reassuring about Romney’s plan to cut hundreds of billions from Medicaid. But the welfare analogy isn’t the only cause for concern. The Congressional Budget Office, analyzing the Ryan cuts, found that states “would face significant challenges in achieving sufficient cost savings through efficiencies to mitigate the loss of federal funding.”

So much for Romney’s mythical world in which huge cuts can be accomplished with zero harm to the poor and disabled. Instead, according to the CBO, states would face a menu of unappetizing choices. If they did not want to raise taxes or reduce other spending, they would have to choose among cutting already low provider payments, reducing the benefits that the program covers or throwing people now eligible for help off the program.

Brutal arithmetic

The impact of Romney’s approach on the safety net would go far beyond Medicaid. The brutal arithmetic of Romney’s stated plan to cap spending at 20 percent of the gross domestic product — while increasing defense funding — is that safety net programs would have to be chopped. Romney’s tax plan would exacerbate the unfairness. He would continue the Bush tax cuts for the wealthiest Americans and provide extra breaks that would primarily help the rich. Taxpayers with incomes of $1 million or more would see an average tax cut of $287,000 compared to letting the Bush tax cuts for the wealthy expire.

At the same time, Romney would do away with recent increases in the child tax credit and the earned-income tax credit — provisions that help low-income families. As a consequence, between 16 and 20 percent of those with incomes of $50,000 or less would actually see their taxes rise under a President Romney. In other words, Romney would spend hundreds of billions for a tax cut whose benefits flow overwhelmingly to the wealthiest Americans, even as he cut even more from programs that help the most vulnerable.

Those skewed priorities are hard to square with Romney’s stated concern, however heartfelt, for the poor. The man from Bain Capital needs to take another look at his figures.