Mitt Romney on Budget & Economy
Former Republican Governor (MA); presidential nominee-apparent
I also want to make sure that we get this economy going. And there are two very different paths the country can take. One is a path represented by the president, which, at the end of four years, would mean we'd have $20 trillion in debt, heading towards Greece. I'll get us on track to a balanced budget. The president's path means 20 million people out of work struggling for a good job. I'll get people back to work with 12 million new jobs. I'm going to make sure that we get people off of food stamps not by cutting the program but by getting them good jobs.
At the same time, gasoline prices have doubled under the president. Electric rates are up. Food prices are up. Health care costs have gone up by $2,500 a family. Middle-income families are being crushed.
And so the question is how to get them going again. And I've described it. It's energy and trade, the right kind of training programs, balancing our budget and helping small business. Those are the cornerstones of my plan.
And finally, with regards to that tax cut, look, I'm not looking to cut massive taxes and to reduce the revenues going to the government.
ROMNEY: Well, I think you know that Fannie Mae and Freddie Mac were a big part of why we have the housing crisis in the nation that we have. Speaker Gingrich was hired by Freddie Mac to promote them, to influence other people throughout Washington, encouraging them not to dismantle these two entities. I think that was an enormous mistake. I think, instead, we should have had a whistle-blower and not horn-tooter. He should have stood up and said, look, these things are a disaster; this is a crisis. He should have been anxiously telling the American people that these entities were causing a housing bubble that would cause a collapse that we've seen around the country. And are they a problem today? Absolutely. They're offering mortgages, again to people who can't possibly repay them. We're creating another housing bubble, which will hurt the American people.
"And frankly, he didn't address those issues in a way that convinced people. Almost everything he has done in his first two years has made it more difficult for our economy to grow. It's been the most anti-investment, anti-jobs, anti-growth administration we've seen in a long, long time. I'm inclined to make sure there is somebody in the race that really understands how the economy works and can get jobs back."
ROMNEY: Look, we can spend our time talking about what happened three years ago and what the cause was of our collapse. But let's talk about what's happened over the last three years. We've had a president responsible for this economy for the last three years, and he's failed us. He's failed us in part because he has no idea how the private sector works or how to create jobs. On every single issue, he's made it harder for our economy to reboot. And as a result, we have 25 million Americans out of work. I can tell you that this is time to have someone who understands how the economy works, who can get America working again. Instead of dividing and blaming, as this president is, let's grow America again and have jobs that are the envy of the world. And I know how to do it.
ROMNEY: My intent is to help the people who have been most hurt by President Obama's economy. And the people who have been most hurt are the middle income families of America. And that's why my plan says that if middle income families want to save their money, anybody earning under $200,000 and not pay any taxes on interest, dividends or capital gains, zero tax on their savings, that's the plan I'm for. And I will get that done in my first year.
ROMNEY: The key to balancing the budget--having spent 25 years in business, I know something about taking waste out of enterprises--I'd love to do that to the federal government. And there is massive waste. But we're not going to balance the budget just by pretending that all we have to do is take out the We're going to have to cut spending. And I'm in favor of cutting spending, capping federal spending as a percentage of GDP, at 20 percent or less, and having a balanced budget amendment. That's essential to rein in the scale of the federal government. And there's a second part to balancing the budget, and that's growing the economy again. The right answer for America is to stop the growth of the federal government and to start the growth of the private sector.
ROMNEY: Oh, sure. And I'll tell you, if you think that the country is, like Texas, going swimmingly well, then somebody who has done that is just terrific. But if you think the country needs a turnaround, that's what I do. If we're going to get this economy going, we've got to do seven things:
ROMNEY: The Federal Reserve has a responsibility to preserve the value of our currency, to have a strong American currency, such that investors and people who are thinking about bringing enterprises to this country have confidence in the future of America and in our currency. People will not invest in this country and create jobs in this country for the American people if they don't have belief in our currency. Of course we should see what the Fed is doing. There should be some oversight to make sure that it's acting properly. But at the same time, we recognize that we need to have a Fed Why do I say that? Because if we don't have a Fed, who's going to run the currency? Congress? I'm not in favor of that. I'd rather have an agency that is being overseen rather than have the United States Congress try and manage our currency.
A: I'm happy to take a look at the Massachusetts record, because when I came in as governor, we were in a real freefall. We were losing jobs every month. We had a budget that was way out of balance. We were able to turn around the job losses. At the end of four years, we had our unemployment rate down to 4.7%. The policies that will get us working again as a nation are policies I understand having worked in the private sector. Look, if I had spent my whole life in government, I wouldn't be running for president right now. My experience, having started enterprises, having helped other enterprises grow and thrive, is what gives me the experience to put together a plan to help restructure the basis of America's economic foundation so we can create jobs again. Our president doesn't understand how the economy works. I do, because I've lived in it.
The question is not the people that are not paying taxes at the low end. The question is not the people who are very, very rich. The question is, how about middle-income Americans?
Who are the people most hurt by the Obama economy? And the answer is the middle class. The great majority of Americans are having a very, very difficult time. And our effort has to be to find ways to reduce to burden on those people.
And that's why I've proposed that anybody who's earnin $200,000 a year and less ought to be able to save their money tax-free, no tax on interest, dividends, or capital gains. Let people save their money, invest in America, and not have to give more money to the government. The middle class needs our help.
A: I'm not going to give you an exact time-frame, but I can tell you this, that if you spend your life in the private sector, you understand that what Pres. Obama has done is the exact opposite of what the economy needed to be done. There are really seven things that need to be done:
A: Every time you have an occasion to take something from the federal government and send it back to the states, that's the right direction. And if you can go even further and send it back to the private sector, that's even better.
Instead of thinking in the federal budget, what we should cut--we should ask ourselves the opposite question. What should we keep? We should take all of what we're doing at the federal level and say, what are the things we're doing that we don't have to do? And those things we've got to stop doing, because we're borrowing $1.6 trillion more this year than we're taking in.
Q: Including disaster relief?
ROMNEY: We cannot afford to do those things without jeopardizing the future for our kids.
Our own lack of vision led to the collapse of our financial markets and our economy. It precipitated a global recession, triggered the loss of $12 trillion of our citizens' net worth, and dealt a sharp blow to world freedom. We simply did not see that so-called subprime home mortgages, liar loans, and nonqualified loans had the potential to cause such destruction.
There may be a dangerous strain of self-interest among the citizenry in democracies as well. If citizens in a democracy foster short-term self-interest rather than promoting the long-term interest of the nation--placing themselves above their descendants--there is little likelihood that they will vote for visionary transformative leaders who advocate difficult change and sacrifice.
As virtually every American discovered beginning in fall of 2008, a strong economy is also the foundation of our citizens' prosperity: Americans have experienced the impact of a weakened economy. But beyond the lows of recession and the highs of expansion, the sustained wealth of our families and communities is also driven by workforce productivity.
Whether you are interested in spending more on benefits or you want to add to defense, achieving your objectives depends on the nation's productivity.
The President has already moved to stop our economy's downward spiral. Parts of the stimulus will, in fact, do some good. But too much of the bill was short-sighted and wasteful. Every single Republican in Congress voted in favor of a better stimulus plan, one that focused on creating jobs immediately. But Congressional Democrats couldn't restrain themselves from larding up their bill with tens of billions of dollars for their political friends. Republicans wanted to stimulate the economy, Democrats wanted to stimulate the government. Conservatives in the House and Senate stood their ground and voted no--and they were absolutely right.
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.
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.
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.
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.
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.
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.
As the debate turned more partisan, Romney's tone changed. Before "No Apology" was released in paperback, he revised the text and turned up the political rhetoric: "This is the first time government has declared war on free enterprise." His campaign team acted as if there had been no change at all, that this had been Romney's position all along. Said a spokesman: "A lot has occurred over the last two years."
Reporters pointed to a pile of stories throughout 2011 of Romney telling audiences across the US that the economy had gotten much worse under Obama. In February in New Hampshire he claimed, "Obama had inherited a bad economy and promptly made it worse." The rhetoric survived into the Republican debate in New Hampshire when he said President Obama "didn't create the recession, but he made it worse and longer." When pressed for an explanation, Romney's campaign tried to change the subject, arguing that the candidate's response had been to a "reporter's comment about the stock market," and that it is "an undeniable fact that Barack Obama has failed to create jobs and fix the economy."
GINGRICH: He's certainly right that you want to get to the real value of the houses as fast as you can. But in the long run, you want the housing market to come back? The economy has to come back.
: [to Romney]: Not one of your 59 points in your economic plan mentions or addresses housing. Can you tell us why?
ROMNEY: Yes, because it's not a housing plan. It's a jobs plan. The best thing you can do for housing is to get the economy going, get people working again, seeing incomes coming up so people can afford to buy homes. You have to let the market work and get people in the homes again, and the best way for that to happen is to allow this economy to reboot. What we know won't work is what this president has done, which is to try and hold off the foreclosure process, the normal market process.
ROMNEY: No, I'd be looking for somebody new. I think Ben Bernanke has over-inflated the amount of currency that he's created. QE2 did not work. It did not get Americans back to work. It did not get the economy going again. We're still seeing declining numbers in prior quarter estimates as to what the growth would be. We're growing now at 1% to 1.5%. The plan I put forward will grow our economy at 4% per year for four years and add 11.5 million jobs. That's a very different approach than Ben Bernanke's taken, and it's a demonstrably different approach than Barack Obama has taken, and that's in part because we have very different life experiences.
A: The bailout program was not a success because it wasted $17 billion. When the auto company CEOs went to Washington asking for money, I said the right process is not big check from Washington, but instead letting these enterprises go through bankruptcy, getting rid of the unnecessary costs, and re-emerge on their feet again. Instead, the Bush administration and the Obama administration wrote checks to the auto industry.
Q: You wrote in Nov. 2008, "If GM, Ford and Chrysler get the bailout, you can kiss the American automotive industry goodbye." Were you wrong?
A: No, I wasn't wrong, because if you read the rest of the op-ed piece, it says they need to shed unnecessary costs. If they just get federal checks, they're going to be locked in with high UAW legacy costs. They'll never be able to get on their feet. They have to go through bankruptcy. And it turned out that that's finally what they did.
But Secretary Paulson's proposal was not aimed at saving sick Wall Street banks or even at preserving jobs on Wall Street. It was intended to prevent a run on virtually every bank and financial institution in the country. It did in fact keep our economy from total meltdown.
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George W. Bush (R,2001-2009)
Bill Clinton (D,1993-2001)
George Bush Sr. (R,1989-1993)
Ronald Reagan (R,1981-1989)
Jimmy Carter (D,1977-1981)
Gerald Ford (R,1974-1977)
Richard Nixon (R,1969-1974)
Lyndon Johnson (D,1963-1969)
John F. Kennedy (D,1961-1963)