Mitt Romney on Budget & Economy

Former Republican Governor (MA)

Apply Reaganomics to current recession: cut taxes & grow

Q: What is the biggest difference between you and John McCain when it comes to the economy? A lot of fear right now of recession. People are hurting. What’s the biggest difference between your strategy and his?

A: Well, the list is very long. The last time we had a recession, President Bush recognized the best thing you can do is lower taxes and put forward a tax bill. And John McCain was one of only two Republicans to vote against it. He does not understand the first lesson of Reaganomics, which is, you cut taxes to grow the economy.

Q: What would you do differently than the president would do?

A: There are two things that I’d add to the legislation that relate to long-term growth incentives. One is to say to people who are making under $200,000 a year, they ought to be able to save their money, tax-free, no tax on interest, dividends or capital gains. And secondly, for people 65 years of age & older, my view is that they should not have to have payroll taxes taken out of their incomes.

Source: CNN Late Edition: 2008 presidential series with Wolf Blitzer Jan 27, 2008

Make sure that we rein in spending

We’re going to have to make sure that we rein in spending. It’s not just we all agree on the earmarks & the pork barrel spending & the “Bridge to Nowhere.” But the big one is entitlements & reining in entitlement costs, and that’s where the big dollars are. What you’re seeing in a weakening dollar, in a declining stock market, in foreign countries coming here to buy into our banks, you’re seeing the foundation of our economy being shaken by that we haven’t been doing the job that needs to be done.
Source: 2008 GOP debate in Boca Raton Florida Jan 24, 2008

Support some kind of national catastrophic fund

I do support some kind of national catastrophic effort to make sure that people can get homeowner’s insurance that protects them against flood or hurricane or tornado or whatever natural disaster might occur, or man-made disaster in some cases. People wh live along the coastline across the Atlantic have the same problem. Getting homeowner’s insurance is oftentimes almost impossible. So what we’re going to have to do, as you just indicated, we’re going to have to work together to create a program that get people in high-risk areas insured. Now, I’m not in favor of saying that the people in Iowa should have to subsidize the people in Massachusetts or Florida--that doesn’t make a lot of sense--but to have those states that are in high-risk areas come together and say, “How do we organize an effort on a national basis that actuarially deals with the differences between different states and the different risks they face and make sure that we have a backstop behind the private insurance industry?”
Source: 2008 GOP debate in Boca Raton Florida Jan 24, 2008

Only someone who worked in private sector can fix economy

Q: Tell us why voters should support you over Rudy Giuliani.

A: Mayor Giuliani is a wonderful fellow. But he’s spent his life working in the governmental sector. I spent my life working in the private sector. And when it comes to trying to help see jobs come back, see our economy stronger, voters are going to want somebody who really understands how the economy works, and someone who has run something and someone who can, from the outside, finally get inside Washington and turn the place inside out

Q: Tell us why voters should support you over John McCain.

A: Sen. McCain is an honorable and courageous individual. But he has been in Washington all of his career. And I don’t think you’re going to see change in Washington by somebody who’s been such a part of it all of these years. I think people recognize that it’s essential to have somebody who’s had a job in the economy, who knows how the economy works and can fight to bring good jobs for middle-income Americans.

Source: CNN Late Edition: 2008 presidential series with Wolf Blitzer Jan 20, 2008

Couple short-term stimulus with long-term growth boost

Q: You announced your economic stimulus package yesterday: a number of tax cuts for individuals and businesses, and the price tag for your plan would be $233 billion, which is much bigger than the plan that President Bush announced. So are you saying that his is too small to do the job?

A: Well, I like mine better. And there are two reasons. One is mine has a very large dose of long-term growth incentives. It’s not just designed to be a short-term stimulus, but rather a long-term growth boost. Not only by allowing capital expenditures to be expensed over these next two years, but also lowering the corporate tax rate so that we can get more businesses to stay here and grow here. So you really have to divide my incentive plan between those things that are long-term in nature and those things that are short- term and stimulative. And I think it probably divides about 50-50.

Source: 2008 Fox News interview: “Choosing the President” series Jan 20, 2008

Avoid housing foreclosures to avoid recession

Q: What would be your immediate first step that you would take regarding fears of a recession?

A: I’d go aggressively after the housing market to make sure that servicing organizations combine in some cases, perhaps forming cooperatives to work together with homeowners to keep homes that are absolutely not necessary to going into foreclosure, to keep them with homeowners in them so that we don’t dump housing product in the housing market and cause a further reduction in housing prices.

Source: CNN Late Edition: 2008 presidential series with Wolf Blitzer Jan 13, 2008

To avoid recession, deal with housing crisis & gas prices

What do we have to do at the federal level to keep a recession from occurring?
  1. We’re going to have to make sure that we stop the housing crisis.
  2. We’re going to have to reduce taxes on middle-income Americans immediately.
  3. We’re going to have to deal with gas prices. We’re going to have to finally become energy independent and make the investments in new technology that will allow us to get there.
  4. And, finally, R&D, investments in science and technology. That’s an area where America can continue to lead the world.
It’s time for us not just to talk about improving our economy; we’re going to have to do the hard work of rebuilding our economy, strengthening it. And I know that there are some people who think that some jobs have left that are never coming back. I disagree. I’m going to fight for every single job, in every state in this country. We’re going to fight for jobs & make sure that our future is bright. We’re going to protect the jobs of Americans and grow this economy again
Source: 2008 GOP debate in S.C. sponsored by Fox News Jan 10, 2008

Economic strength comes from people, not from Washington

Q: Does our country’s financial situation creates a security risk?

A: This is, indeed, a time of extraordinary challenges in this country, and the overspending in Washington and the overpromises that we’ve made are certainly among those challenges. But this is not a time for us to wring our hands and think that the future is bleak. In fact, the future is bright. We need leadership to rein in excessive spending, and to help America grow. The best answer for our economic woes is to make sure we have good jobs for our citizens, good schools for our kids, good health care for everyone, and that we have policies that promote the growth of the nation. We can have a level playing field around the world, get ourselves off of foreign oil, reduce the excessive spending in Washington, and have a bright future for our kids. This is based upon the strength of the American people. If you want to see a strong America, you don’t look to Washington; you look to ways to strengthen the American people.

Source: 2007 Des Moines Register Republican debate Dec 12, 2007

Cut deficit via waste, like 342 different economic programs

Q: Are there programs that are so important that you’d be willing to run a deficit to pay for them?

A: Well, we don’t have to run a deficit to pay for the things that are most important because we can eliminate the things that aren’t critical. We have, in the federal government, 342 different economic development programs, often administered by different departments. We don’t need 342. We probably need a lot fewer than 100 of those. We have 40 different programs for workforce training. There are probably 5 or 6 that are really working. We can get rid of some of those. And so what anyone in the private sector’s learned how to do is to focus their resources on those things that have the biggest impact, that are most important. Surely, protecting our country and our defense of our military is critical [as are healthcare and schools]. And the sacrifice we need from the American people, it’s this: it’s saying let the programs that don’t work go. Don’t lobby for them forever.

Source: 2007 Des Moines Register Republican debate Dec 12, 2007

Fundamentally change how Washington works, to reduce pork

Q: What would you do to the pork spending?

A: Every bill that comes forward that’s got pork in it and earmarks that are unnecessary, we’ve got to veto them and send them back. But it’s got to be broader than that. We’re going to have to see fundamental changes in the way Washington works. We’re just not going to get out-of-the-box thinking with inside-the-Beltway politics.

Source: 2007 GOP YouTube debate in St. Petersburg, Florida Nov 28, 2007

Giuliani increased spending by 2.8%; I held increase to 2.2%

Q: Your difference with Mayor Giuliani on tax cutting?

ROMNEY: Well, we both agree with the need to cut taxes and have fought to do so. [But] Mayor Giuliani fought to keep the commuter tax, which was a very substantial tax, an almost $400 tax on commuters coming into New York.

GIULIANI: The difference is that under Governor Romney, spending went up in Massachusetts per capita by 8%; under me, spending went down by 7%. I brought taxes down by 17%. Under him, taxes went up 11% per capita. I led, he lagged.

ROMNEY: It’s a nice line, but it’s baloney. Mayor, you got to check your facts. #1, I did not increase taxes in Massachusetts; I lowered taxes. #2, the Club for Growth looked at our respective spending record. They said my spending grew 2.2% a year; yours grew 2.8% a year. But look, we’re both guys that are in favor of keeping spending down and keep taxes down. We’re not far apart on that.

Source: 2007 Republican debate in Dearborn, Michigan Oct 9, 2007

FactCheck: Closed MA budget gap of $1.2B, not $3B

Romney again claimed that he didn’t raise taxes when governor of Massachusetts and that he faced a $3 billion budget shortfall. We have twice pointed out that Romney in fact increased fees by around $500 million during his four years as governor. Romney’s cuts in local aid also led indirectly to local tax increases (mainly in the form of property tax increases). Similarly, Romney’s claim to have closed a $3 billion budget gap is exaggerated. In fact, the gap was closer to $1.2 billion.
Source: FactCheck.org on 2007 GOP debate at UNH Sep 5, 2007

Disagrees with reported negative study of MA economy

Q: You have said one of your top priorities is to strengthen the American economy. I want to take a look at your record of performance as governor of Massachusetts. Here it is. Your state ranked 3rd-lowest in creating new jobs during your term. Manufacturing employment dropped 14%. That was the 3rd-worst record in the country. And there was a net migration of 222,000 people from Massachusetts, a net migration. That was the 3rd-highest population loss in the country during those years. A Northeastern University study says the economic performance of Massachusetts during the Romney years was one of the worst in the country.

A: I’ve got very different statistics than you do. First of all, there were no censuses taken during that time period, and so any numbers on population are just estimates by various folks. Second, when I came in to Massachusetts, we were losing jobs every single month. Our budget was out of balance by some $3 billion. We turned that around.

Source: Fox News Sunday: 2007 “Choosing the President” interviews Aug 12, 2007

AdWatch: Cap discretionary spending at inflation minus 1%

[Romney’s TV ad has run mostly in Iowa and New Hampshire, since April 4]:

ROMNEY: If I’m elected president, I’m going to cap non-defense discretionary spending at inflation minus 1%. That would save $300 billion in 10 years. And if Congress sends me a budget that exceeds that cap, I will veto that budget. And I know how to veto. I like vetoes. I’ve vetoed hundreds of spending appropriations as governor. And frankly, I can’t wait to get my hands on Washington!

Source: FactCheck.org: AdWatch of 2007 campaign ad, “I Like Vetoes” Jun 28, 2007

Washington is broken; needs fundamental change

As you look at what’s happening in the federal government, [key is to consider] that Washington is broken. We need to have fundamental change in the way business in Washington is carried out. What that means is we’re going to have to have leadership that can reorganize the government. We’re going to have about 40% of the government employees turn over in the next couple of terms. Let’s go through all the agencies, all the departments, all the programs and cut out the unnecessary and the wasteful.
Source: 2007 Republican Debate in South Carolina May 15, 2007

First challenge as governor was $3B budget gap

The first challenge [of my governorship] was budgetary. I had not run for governor to manage numbers, but numbers were what stood out in our triage. During the campaign, the media reporters were unrelenting with questions about the budget: How would I fill a $1 billion budget gap in the next year’s budget?

[After the inauguration, we did a full] bottom-up analysis, resulting in some somber news. The budget gap for the next year was closer to $3 billion. Further, there was a shortfall in the current year of $600 million. Immediate cuts were necessary to prevent a possible cash crunch. The budget for the next year would test the entire administration team: finding $3 billion would be a real stretch.

The vision had already been set: it was the heart of last year’s campaign. I was determined not only to adhere to our themes, but also to fight for every single promise I had made.

Source: Turnaround, by Mitt Romney, p.382-383 Aug 25, 2004

Remedies for budget imbalance: cut expenses or raise revenue

When a budget is out of balance, there are two remedies: cut expenses and raise revenues. I knew from experience that I would find ways to cut costs. But how much I could cut was unclear. I knew that every day, contracts and commitments were being made that locked in spending levels. I would need to take a quick swipe at staunching the spending immediately, then launch a detailed cost containment process that would probably take months. A preliminary review of the cost numbers, however, showed there would be no way to fill the budget hole solely through cost cutting: too much was already committed or spent.

So, the answer would have to be new revenues--marketing and sales. The good news was that companies had already signed on as sponsors, most of them at higher support levels than in prior Olympics. But that was also the bad news: the usual suspects had already been rounded up.

Source: Turnaround, by Mitt Romney, p. 48 Aug 25, 2004

Balance state budget by removing waste and folderol

Romney vowed not to support a freeze or reversal of the plan to roll income taxes back to 5 percent by next year even in the face of a budget hole nearing $3 billion. “The easy way to fix any problem is to go to the people and say you have to pay more money, but that’s not what the job of management is,” Romney said. “The job of management is to find ways to permanently and structurally change the costs of our structure such that we can have a balanced budget without always raising taxes every time people think there’s a need.“

Romney, CEO of the Salt Lake Olympic games, said his experience in Utah taught him waste can be found & rooted out. ”We took things out that were waste, that were unnecessary, the folderol that wasn’t essential to carrying out the mission of a great Olympics,“ Romney said. ”The same thing, I believe, can happen in government.“

Democrats running for governor noted that Romney’s Olympics relied heavily on government subsidy, pulling as much as $1.5 billion from taxpayers.

Source: David Guarino, Boston Herald Mar 22, 2002

Will cut deficit and help Americans save

The GOP candidate declares that he wants to become known as the “jobs senator” by persuading the government to cut the deficit and raise Americans’ savings rate to make more capital available for companies to invest and boost employment.
Source: Peter Gosselin in Boston Globe Oct 20, 1994

Other candidates on Budget & Economy: Mitt Romney on other issues:
GOP: Sen.John McCain
GOP V.P.: Gov.Sarah Palin
Democrat: Sen.Barack Obama
Dem.V.P.: Sen.Joe Biden

Third Parties:
Constitution: Chuck Baldwin
Libertarian: Rep.Bob Barr
Constitution: Amb.Alan Keyes
Liberation: Gloria La Riva
Green: Rep.Cynthia McKinney
Socialist: Brian Moore
Independent: Ralph Nader
Civil Rights
Foreign Policy
Free Trade
Govt. Reform
Gun Control
Health Care
Homeland Security
Social Security
Tax Reform

Page last updated: Feb 08, 2010