Why the current spending bill, deficit debate takes Mitt Romney out of the presidential run

A nice piece in today’s The New York Times.com documenting the Republicans’ emphasis on cutting spending as a priority in the 112th Congress. While I’m all streamlining government, it’s interesting how a party that has at times called for government to be run as a business is now calling for government to shrink.

For example, all businesses want to increase revenues, run their operations efficiently in order to actualize savings, and expand. Revenue increases along with eliminating unnecessary expenses leads to increased shareholder income. Increased revenues are a result of selling more goods and services. Businesses reduce their expenses by replacing laid off workers with new technology and squeezing out more productivity from the remaining employees.

We can’t apply that model to government. Government does not produce goods and services for resale in the economy. Its revenues come primarily from tax receipts. Americans have been clear that they are against tax increases, even though this is one tool that can be used to address another fiscal policy issue: the deficit.

What type of impact from this conundrum can we see on the presidential election in 2012? First, for the likes of a Mitt Romney, running on business bona fides won’t do. Notwithstanding his connection to Wall Street and investment banking overall, plus his stewardship of a Massachusetts healthcare plan that reminds some critics of Obamacare, Mr. Romney shouldn’t go around talking about running government like a business unless he is ready to explain how he can grow revenues to cut a deficit while not raising taxes.

Fiscal conservatives like Mr. Romney may have to do something radical: teach and lead. They will have to teach Americans in the simplest and clearest terms that the deficit will not shrink without Americans pitching in.

Second, Mr. Romney will have to persuade not only Congress (which may not be in his hands should they share some of the blame for a still poor economy), but the American people. The average worker will have to be persuaded that giving up their tax cuts in 2012 is better than kicking the deficit can down the road.

About Alton Drew

Alton Drew brings a straight forward and insightful brand of political market intelligence. Alton Drew graduated from the Florida State University with a Bachelor of Science in economics and political science (1984); a Master of Public Administration (1993); and a Juris Doctor (1999). You can also follow Alton Drew on Twitter @altondrew.
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One Response to Why the current spending bill, deficit debate takes Mitt Romney out of the presidential run

  1. Ken Ciszewski says:

    The Republicans have been beating that dead horse about cutting spending since at least Ronald Reagan. Reagan wanted to cut waste and as a result shrink government. What he really meant was that his definition of “waste” was programs he didn’t like on ideological grounds. While he cut taxes nominally, he had to secretly raise them by removing tax breaks for the wealthy. Even then, he ran a huge deficit.

    The current failure to let the Bush tax cuts expire was caused by the fact that President Obama and the Democrats know the Republicans are against higher taxes, as are the so called “Tea Party”. Obama tried a split deal–no tax increase for those under $200,000/$250,000, tax increases for those above those incomes. He knew, of course, that that wouldn’t fly either, since the Republicans would take from anybody, the middle class, the poor, whoever, to give to the rich. My joke from the 2004 campaign was that the GOP campaign slogan was “Bush Cheney 2004–No Rich Person Left Behind!!” The recent actions of the Republicans validate this idea, especially after all their fake rhetoric about deficits and why we can’t borrow a few billion dollars to help the unemployed while at the same time they want to give the wealthy hundreds of billions of dollars.

    Warren Buffet said it best when he recently told an interviewer that it will be necessary to raise taxes, and the only question is, will the increase come form people like Warren Buffet, or will it come from the people who serve him at the local coffee house.

    As for running the government like a business, well, it’s not a business–it’s suppose to serve the general welfare of all the people it governs. I don’t know of any business that has that as a vision and mission–making a profit and promoting the general welfare are not compatible.

    Mr. Drew rightly points out that the tax increase issue has been kicked down the road to 2012 and beyond. The question is, unless the deficit problem is viewed as disastrous at that time, there will be lots of talk about it, but nothing will be done. If Obama runs, he’ll avoid the issue if possible, and he can blame the Republicans for it because they blocked the expiration of the Bush tax cuts. The Republicans can continue to talk about tax cuts, but if the deficit is too large, that might blow up in their face. In any case, whoever wins in 2012 will have to convince Congress to let the Bush tax cuts expire if they already haven’t. The free lunch/free ride is pretty much over.

    As an average worker, I would gladly have paid more had the Bush tax cuts expired. The thing is, those who have little income or are unemployed don’t pay much anyway, and the little more they might pay is miniscule. As for those in the top brackets, since they are doing so well, they wouldn’t be hurt much either. I seriously doubt that the expiration would hurt job creation much.

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