Ross Douthat is the third columnist this week who is trying his hand as a Romney speechwriter following on an effort by Robert Samuelson on Monday, and David Brooks on Tuesday. Let's see what he's got.
Douthat has a plan for what Romney should "tell the 47 percent." He begins by noting that Romney is at best even with President Obama among white working class voters outside of the South. He tells readers that Romney is even losing some voters who are convinced that Obama is really Kenyan. The problem is that they think Romney is for the rich. Anyhow, Douthat has some plans to convince the 47 percent otherwise.
His begins by mentioning two items that it would be great to see any politician champion. The first is a plan by Glenn Hubbard, one of Romney's top economic advisers, to allow underwater homeowners to refinance at low interest rates. While President Obama has already embraced part of this package (all underwater homeowners with loans guaranteed by Fannie Mae and Freddie Mac can now refinance their loans), there are other parts that could still profitably be pursued.
Hubbard's proposal calls for eliminating excess costs in the financing process that increase the gap between the rates paid by borrowers and the interest received by lenders. These are all the fees that go to mortgage brokers, title insurers, closing lawyers. There are tens of billions of dollars wasted every year on these middle people who contribute virtually nothing or nothing to the process. If Romney, Obama, or anyone else can push through measures that would reduce these costs, that would be great policy.
The other item on the table is breaking up too big to fail banks, a policy recently trumpeted by that well know socialist, George Will. True believers in markets don't want the government to subsidize banks with an implicit guarantee. This is just a handout, but most politicians from both parties have been happy to use taxpayers dollars for this purpose. (Question for Romney: are the subsidizedWall Street bankers part of the 47 percent?)
Okay, but let's get to the speech. The first item is to assure the 47 percent that Romney would not raise their taxes:
"Whatever shape tax reform ultimately takes, under my administration, no middle or working class American will pay a penny more in taxes than they do today. Not a penny more. And to prove that I’m serious about protecting working families, tonight I’m calling for a four-year extension of the payroll tax cut, so that Americans don’t have to worry about seeing their tax bills go up an average of $1000 when the cut expires next year."
This is interesting. If we cut taxes for the wealthy and we don't take back deductions and we also extend the payroll tax cut then we are talking about considerably larger deficits. That's okay by me, but I believe in arithmetic. The Washington pundit/policy types who worship at the alter of balanced budgets and don't care about the arithmetic of GDP accounting (in the current economy, lower deficits will mean less demand, less growth, and therefore higher unemployment) would likely be very upset by Douthat's plan to have Romney push for higher deficits. It might also be hard to reconcile Romney's call for trillion dollar plus annual deficits with all of those ads yelling about President Obama's huge deficits.
Okay, let's move on the health care:
"We’re going to repeal Obamacare: It taxes too much, cuts Medicare too deeply, pours more money into a broken system and piles on regulations that will keep driving costs up and up and up. But tonight I want to speak to Americans who don’t have health insurance, or struggle to pay for it, and make this pledge: Under my administration, you will not be forgotten. I promise to create a tax credit, worth thousands of dollars, to help people who don’t get insurance through their employers. I promise to expand high-risk pools where people with pre-existing conditions could get coverage more cheaply than they do today. When I was governor of Massachusetts, we cut the number of uninsured by more than half. Tonight, I’m setting the same goal as president – and we don’t need a government takeover of health care to do it."
Hmmm, this one could be a bit of a problem. Douthat wants Romney to announce the end of Obamacare as a wasteful boondoggle and then boast about how he cut the number of uninsured in Massachusetts by more than half. Of course the way that Romney reduced the number of uninsured in Massachusetts by more than half was by implementing Obamacare. As M.I.T economist Jonthan Gruber, who advised both Romney and Obama, has commented, it's the same damn plan. But hey, we're just talking about getting this one by the Washington press corps. Douthat could be right, Romney might be able to pull it off.
Then we have the Romney plan for Medicare:
"But first, by asking wealthy Americans – the Warren Buffetts and Bill Gateses and others like them — to put a little more money toward their medical care, so that everyone else’s costs don’t have to rise. And second, by getting insurers to bid against one another to drive the cost of Medicare down, so that you can get the same benefits at a lower price. Let me be clear: If my plan doesn’t work, the government will be on the hook, not seniors. Nobody, I repeat nobody, will be left without coverage. But I believe that it will work – and doing nothing, as the president prefers, is simply not an option."
Okay the wealthy Americans line is cute, but in reality we can snap our fingers and nix benefits for the Warren Buffets and the Bill Gateses and we will be left with the exact same problem. We won't have to change any numbers in our projections since they are usually rounded to the closest billion and the few million dollars we will save from this brilliant plan probably won't even affect the rounding. Unless we think that people who earn $40,000 a year are like the Warren Buffetts and Bill Gateses, we won't get enough from this sort of means testing to make it worth bothering with. Oh yeah, these people also paid for their benefits, but whose counting?
Then we have the second part, we're going to have private "insurers bid against one another to drive the cost of Medicare down." What a great idea! This is kind of like what we did in the 90s with Medicare Plus Choice, courtesy of the Gingrich Congress. Then we had Medicare Advantage, brought to you by President George W. Bush. Both of these experiments led to higher costs, not lower costs. And we have the huge private insurance market for the non-Medicare population which doesn't work very well. But hey, let's keep trying the same experiment, it may work one of these days.
Anyhow, that's Douthat's pitch as a Romney speechwriter. Does he get the job?