GOP plans would add to debt

WASHINGTON – Massive tax cuts proposed by GOP presidential candidates Newt Gingrich and Rick Santorum would cause the national debt to explode while Mitt Romney’s budget plan could generate red ink in line with current projections, according to a new study released Thursday.

The nonpartisan Committee for a Responsible Federal Budget, a Washington-based budget watchdog group, estimates that the wrenching budget cuts proposed by Ron Paul would lessen the flow of red ink compared with current policies but still leave the government running a sizable deficit.

The GOP candidates’ budget plans provide a sharp contrast with President Barack Obama, who released his latest fiscal blueprint just last week that includes proposals to raise taxes on the wealthy.

Like Obama, the GOP candidates have the luxury of suspending political reality and assuming lawmakers would quickly enact their ideas into law.

That translates into a tax code in which taxes on investments and capital gains are sharply reduced or eliminated. Each GOP candidate would eliminate inheritance taxes on large estates. And tax rates on individuals would be cut as well – all in the face of deficits that economists say would eventually cripple the economy.

The results, according to the study, would be higher deficits, except in the case of Paul, whose spending cuts dwarf anything being considered by his three rivals.

According to the study, Gingrich’s plan would add $7 trillion to the nation’s debt over the coming nine years – almost doubling the deficits that would be recorded if the government basically ran on autopilot. Santorum’s plan would add $4.5 trillion over the period, or about $500 billion to the deficit every year on average.

By contrast, Romney’s proposal would add $250 billion to the deficit over nine years, though that estimate was generated before he unveiled a new tax proposal this week that could add considerably to the deficit.

And Paul, whose budget plans include eliminating five Cabinet departments, immediately ending operations in Iraq and Afghanistan, and sharply cutting federal programs like Medicaid and food stamps, would reduce the deficit by $2.2 trillion. He is the only candidate whose spending cuts exceed the amount of revenue lost by cutting taxes.

The candidates’ ambitious budget plans contrast with GOP leaders in Congress, who have focused on retaining the full menu of Bush-era tax cuts rather than attempting to cut taxes further – and have opened the door to higher tax revenues as part of a comprehensive deficit-cutting deal.

Last week, Obama proposed tax increases of almost $2 trillion over the coming decade – chiefly by ending Bush-era cuts on individual income exceeding $200,000 a year and family income exceeding $250,000.

The budget group’s advisers include many Democratic deficit hawks and Republicans unafraid to advocate for higher taxes. The group acknowledged plenty of wiggle room in the study since many of the candidates’ proposals are vague or haven’t been reviewed by official sources, like the Congressional Budget Office.