Club for Growth on Mitt Romney (you’re gonna want to read this one, folks)

Just like in 2008, the Club for Growth is putting together a series of white papers on candidates running for the Republican Party’s presidential nomination. They’ve already looked into the records of Newt Gingrich, Tim Pawlenty and Herman Cain. Next up is Mitt Romney; and it ain’t pretty.

The Club for Growth, which has received some good press on this release, points out that Romney has had a mixed record on taxes, supporting “fee” hikes, closing tax “loopholes” and tax hikes on businesses as Governor of Massachusetts. However, they do note some positives; such as unsuccessful proposals to cut the state’s income tax and a successful one-year rebate on the capital gains tax; certainly not an easy feat with a Democratic legislature.

But ulitmately, the Club concludes that Romney has been inconsistent on taxes; noting that while he supports keeping the 2001 and 2003 tax cuts permanent, he has also opposed pro-growth reforms:

He opposed Ballot Question 1 to eliminate the state income tax and proposed an auto excise tax on SUVs and a greenfields tax on the development of ocean space.   In 2003, the Governor refused to endorse the Bush tax cuts, earning the praise of Massachusetts liberal congressman Barney Frank,  and was even open to a federal gas tax hike.   His strident opposition to the flat tax is most curious and difficult to explain since Romney wasn’t a political candidate at the time. In 1996, he ran a series of newspaper ads in Boston, New Hampshire, and Iowa denouncing the 17% flat tax proposed by then presidential candidate Steve Forbes as a “tax cut for fat cats.”   In 2007, Romney continued to oppose the flat tax with harsh language, calling the tax “unfair.”

The Club notes that the Cato Institute gave Romney a “C” in economic policy (spending and taxes) in 2004 and 2006. However, they note that Romney was good on budget issues by keeping spending below the population growth plus inflation benchmark; effectively meaning that the budget didn’t increase during his time in office. They do note that his last budget was atrocious due to the size of the increased spending; hiking it by 10% from the previous year.

They are also willing to cut him some slack in this area considering the overwhelmingly Democratic legislature. But after this the compliments on Romney’s spending record ends are hard to come by.

While they note his opposition to the so-called stimulus bill passed in 2009, the Club points out that he was actually somewhat complementary of it in his book; meaning that he seems to harbor some support of Keynesian economic policies

The Club notes that Romney supported interventionist policies in lending, TARP and ethanol subsidies. They also point out his “opposition” on the auto bailouts wasn’t really opposition since Romney said, “It is not wrong to ask for government help, but the automakers should come up with a win-win proposition.”

They do give Romney good marks on free trade, regulation, tort reform and school choice; all very important issues to voters that value free markets. They note the reforms he pushed in Massachusetts welfare and pension systems. However, the Club also points out that Romney supports positive steps on dealing with Social Security that popular with free marketers and fiscal conservatives, but has not backed or pushed a comprehensive proposal.

But when you’re talking about Mitt Romney, there is always one issue that comes back to haunt him. And that is the health care law his pushed during while serving as Governor of Massachusett; which, with its mandate requiring individuals to buy health insurance, has served as a blueprint for ObamaCare. Some policy experts, including David Boaz and Michael Cannon at the Cato Institute, say RomneyCare and ObamaCare are one in the same.

Here is what the Club says about the elephant in the room:

But one cannot talk about Romney’s record on entitlement reform without considering the universal healthcare plan Governor Romney helped craft in Massachusetts. The bill that Governor Romney signed with a grinning Ted Kennedy in the background on April 12, 2006.

Governor Romney still defends his plan five years later while publicly saying as President he would repeal and replace ObamaCare.   But the two plans are similar in at least three significant ways:

  • Both have an individual mandate that requires people to purchase a private good – in this case, health insurance – and levies a financial penalty against those who don’t.
  • Both implement a new government bureaucracy called an “exchange” through which all insurance policies are approved, sold, and heavily regulated.
  • Both have sizeable subsidies for low-income people to purchase the mandated coverage.

It’s worth noting that the Obama Administration continually points out that ObamaCare was, in a large way, modeled after RomneyCare.  Romney has rightly received much criticism from economic conservatives for the obvious similarities between his plan and President Obama’s command and control plan.

Governor Romney often defends his plan by rightly saying that the states are “laboratories of democracy.”  However, he should recognize that this is one lab experiment that has completely failed. According to a Heritage Foundation analysis of RomneyCare three years out, the budget for subsidized care had exploded from $133 million in FY2007 to around $800 million by FY2009. In the first year, Massachusetts raised $12 million in revenues from tax penalties assessed by the Individual Mandate.  The Massachusetts Taxpayers Association projects a FY2010 budget of $880 million.

At the time of its passage, Governor Romney claimed that under his plan “the costs of health care will be reduced,”  but the Cato Institute has highlighted several statistics that show that RomneyCare increased costs, including the fact that premiums rose faster post-RomneyCare than anywhere else in the nation, 21-46% faster than the national average.

Cato also noted that there is mounting evidence that “Massachusetts residents are responding to the individual mandate not by obtaining coverage but by concealing their insurance status.  Coverage gains may therefore be less than official estimates suggest” and that “despite stiffer penalties than ObamaCare will impose, increasing numbers of people are gaming the individual mandate by only purchasing health insurance when they need medical care. Such behavior could ultimately cause the ‘private’ insurance market to collapse.”

Empirical evidence demonstrates that RomneyCare has failed to control health care costs, increased the size of government, and by its very nature introduced more government and less freedom into health care markets. Governor Romney should admit that RomneyCare is a failure, and soon.

Romney’s record on health care is one that will make the issue a liability against Obama when it really shouldn’t be. The Club recognizes that, as do many other conservatives.

So what is the bottomline on Romney? (emphasis mine):

Because of his long tenure in public life, especially his presidential run in 2008, Mitt Romney is considered a well-vetted candidate by now.  Perhaps to his consternation, he has developed an unshakeable reputation as a flip-flopper. He has changed his position on several economic issues, including taxes, education, political free speech, and climate change.  And yet the one issue that he doesn’t flip on – RomneyCare – is the one that is causing him the most problems with conservative voters. Nevertheless, he labels himself as a pro-growth fiscal conservative, and we have no doubt that Romney would move the country in a pro-growth direction.  He would promote the unwinding of Obama’s bad economic policies, but we also think that Romney is somewhat of a technocrat. After a career in business, quickly finding a “solution” seems to be his goal, even if it means more government intrusion as a means to an end. To this day, Romney supports big government solutions to health care and opposes pro-growth tax code reform – positions that are simply opposite to those supported by true economic conservatives.  How much Romney’s philosophy of governance will affect his policy goals if elected, we leave for the voters to decide.

Here is the full white paper on Mitt Romney:


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