SOME ECONOMIC CLAIMS DON'T ADD UP
President Obama and Republican rival Mitt Romney spun one-sided stories in their first presidential debate. Here's a look at some of their claims and how they stack up with the facts:
Romney's claim on cutting the deficit: "Obamacare's on my list. ... I'm going to stop the subsidy to PBS. ... I'll make government more efficient."
The facts: Romney has promised to balance the budget in eight years to 10 years, but he hasn't offered a complete plan. Instead, he's promised a set of principles, some of which -- like increasing Pentagon spending and restoring more than $700 billion in cuts that Democrats made in Medicare over the coming decade -- work against his goal. He also has said he will not consider tax increases.
He pledges to shrink the government to 20 percent of the size of the economy, as opposed to more than 23 percent of gross domestic product now, by the end of his first term. The Romney campaign estimates that would require cuts of $500 billion from the 2016 budget alone. He also has pledged to cut tax rates by 20 percent, paying for them by eliminating tax breaks for the wealthiest and through economic growth.
To fulfill his promise, then, Romney would require cuts to other programs so deep -- under one calculation requiring cutting many areas of the domestic budget by one-third within four years -- that they could never get through Congress. Cuts to domestic agencies would have to be particularly deep.
But he's offered only a few modest examples of government programs he'd be willing to squeeze, such as subsidies to PBS and Amtrak. He does want to repeal Obama's big health care law, but that law is actually forecast to reduce the deficit.
Obama's claim about Rom-ney's economic plan: "Gov. Romney's central economic plan calls for a $5 trillion tax cut -- on top of the extension of the Bush tax cuts, that's another trillion dollars -- and $2 trillion in additional military spending that the military hasn't asked for. That's $8 trillion. How we pay for that, reduce the deficit, and make the investments that we need to make, without dumping those costs onto middle-class Americans, I think is one of the central questions of this campaign."
The facts: Obama's claim that Romney wants to cut taxes by $5 trillion doesn't add up. Presumably, Obama was talking about the effect of Romney's tax plan over 10 years, which is common in Washington. But Obama's math doesn't take into account Romney's entire plan.
Romney proposes to reduce income tax rates by 20 percent and eliminate the estate tax and the alternative minimum tax. The Tax Policy Center, a research group, says that would reduce federal tax revenues by $465 billion in 2015, which would add up to about $5 trillion over 10 years.
However, Romney says he wants to pay for the tax cuts by reducing or eliminating tax credits, deductions and exemptions. The goal is a simpler tax code that raises the same amount of money as the current system but does it in a more efficient manner. The knock on Romney's plan, which Obama accurately cited, is that Romney has refused to say which tax breaks he would eliminate to pay for the lower rates.