The Agenda

Peter Suderman on Mitt Romney’s Policy Platform

Peter Suderman has a sharp critique of the vagueness of Mitt Romney’s policy platform:

Indeed, exploring his economic policy proposals is rather like touring a Hollywood backlot. Like a street façade on a movie set, Romney’s economic plans are designed to project an outward appearance of functionality. But when you look behind their cleverly made-up fronts, there’s nothing to see. Romney’s policy offerings on taxes, spending, and entitlements consistently lack crucial structural details; his campaign seems intent on emulating the outward appearance of policy proposals without providing anything that’s actually workable.

For Suderman, Romney’s tax proposal is emblematic of a larger problem:

Take Romney’s proposed overhaul of the tax code. Vague on details and short on substance, it’s more like a press release than anything resembling an actual plan to rewrite the country’s massive, complex tax code. The few details it does reveal tend to focus on the goodies Romney would like to offer and less on their price. Romney proposes an across the board tax cut along with cuts to the corporate rate and various other reductions, including a repeal of the alternative minimum tax. Combined, the Manhattan Institute’s Josh Barro estimates that Romney’s proposals would reduce federal tax revenues by up to $5 trillion over the next decade.

In keeping with his vow to balance the federal budget, Romney also promises to make these cuts in a way that’s revenue neutral. How? He’s yet to say.

And Suderman is dismissive of the candidate’s reaction to criticisms of his lack of specificity:

Indeed, Romney has actually employed the plan’s murkiness as a way of responding to outside groups that have tried to tally its economic effects and found it wanting. “I think it’s interesting for the groups to try and score it because it can’t be scored because those kind of details have to be worked out with Congress and we have a wide array of options,” Romney said on CNBC earlier today.

The column is a good read, and I recommend it. But my view is very different from Suderman’s. The problem with Romney’s policy platform isn’t its lack of specificity. Rather, it is the fact that he has released as many details as he has regarding a proposed tax overhaul. 

Earlier on, as we’ve discussed in this space, Romney proposed extending the 2001 and 2003 tax cuts and adding a cut in capital income taxation for households earning less than $250,000 as a stopgap measure before pursuing a broader tax reform effort, which he described in broad outline. This struck me as a sensible approach because, as Romney explained in his conversation with CNBC, “details have to be worked out with Congress and we have a wide array of options.” Tax policy has fairly familiar contours. Conservatives and egalitarian liberals tend to have settled views regarding the kind of tax policy they’d like to see, and so all depends on the balance of forces in the next Congress which is, at this point, unknowable.

Before a presidential election, it makes sense to get a sense of what a candidate’s broad objectives are regarding tax policy, but providing an extremely detailed proposal propagates the illusion that presidents can unilaterally implement their plans once in office. Moreover, extremely detailed proposals can tie the hands of a president who must negotiate a policy compromise that reconciles various clashing interests. To reconcile clashing interests in a coherent and plausible way in your own proposal is “to negotiate with yourself.” I might acknowledge that raising revenues is part of an acceptable compromise with “the other team,” but does it make sense for me to unilaterally announce my revenue target? Does that then become an opening bid rather than a final offer? And if it’s a final offer, where does the negotiation go from there? 

It makes perfect sense that policy demanders, like Suderman and I, will want to tie the hands of the candidate who claims to speak for the broad center-right coalition. As a general rule, activists don’t want politicians to have much room for maneuver, to mitigate the inevitable principal-agent problem that arises when you elect someone to speak on your behalf and disciplining said elected official is impossible or extremely difficult. But this rigidity has, as Arnold Kling argues in “How a Default Might Play Out,” dramatically raised the risks of truly catastrophic policy outcomes:

Ideological opposition comes from partisans who are willing to see changes to programs, but who reject certain types of changes. For example, on Social Security, Republicans tend to be ideologically opposed to tax increases while Democrats tend to be ideologically opposed to benefit cuts. On Medicare, Republicans tend to be ideologically opposed to top-down rationing, while Democrats tend to be ideologically opposed to bottom-up choice.

There is a significant probability that by combining ideological opposition and generic opposition, a blocking coalition can readily be formed against any proposed changes to these programs. Thus, even though the need for major reform is evident, it might be that, for every major reform, even once the effort is taken up, its political prospect is only slight.

Conservatives are resisting Romney in part because they sense that he will compromise on core conservative principles. In the end, however, any conservative president will have to compromise to at least some degree as long as non-conservatives represent close to half of the House and the Senate. And that, chances are, will always be true. It’s true that a substantial share of the electorate identifies as politically conservative (the number hovers around 40%). Yet many voters who identify as conservative are, for example, open to increasing taxes on high-earners, particularly if the alternative is deep cuts in entitlement expenditures. That is, many voters who identify as conservatives have views that are in some sense to the “left” of the movement conservative consensus. These are realities that any conservative president will have to deal with in driving forward or facilitating some kind of legislative settlement. 

So Romney is trying to thread the needle. He wants to be specific enough about his broad goals and aspirations to reassure conservatives, and in particular vocal movement conservatives, yet he wants to leave enough room to maneuver so that he can govern effectively if he is indeed elected president. We’ve discussed this in the context of Chris Christie’s 2009 campaign, when strategic ambiguity proved a successful approach. The problem is that Romney doesn’t have the luxury of a profoundly unpopular, politically inept opponent, unlike Christie. Rather, Romney is facing a mildly unpopular, politically competent opponent who is aided by a mostly-friendly metropolitan media and a left-of-center coalition crucially anchored by the 15.3% of U.S. workers directly employed by government at all levels (and that’s not counting a wide array of contractors and non-profit employees funded by taxpayer dollars). 

If you were in his shoes, would you (a) detail the cuts you have in mind and welcome the inevitable firestorm or (b) make a broad and vague case in the hopes that it will resonate with voters? If you pursue (b), the danger is that, like Gov. Scott Walker in Wisconsin (who didn’t devote his gubernatorial campaign to collective bargaining reform) or Gov. Chris Christie (who didn’t emphasize taking a tougher stance with public employee unions in his campaign) or President Obama (who explicitly opposed an individual mandate and attacked Sen. John McCain for calling for curbing the tax break for employer-provided medical insurance as a presidential candidate), you will be accused of not having a mandate for policy initiative X or Y. As my examples suggest, that’s a mixed bag — it may or may not resonate, depending on whether or not the effort is perceived as broadly successful or acceptable. If you pursue (a), there is no guarantee that your political opponents will say, “Well, he did campaign on X or Y after all, so we may as well cut him some slack.” Consider, for example, President Bush’s advocacy of Social Security reform on the campaign trail in 2004. He certainly floated the idea, though admittedly without any great detail. That didn’t prevent a fierce backlash, and not just from the political left.

Romney’s problem is that unlike a Ronald Reagan, who also tried to leave himself plenty of room for maneuver, and who besides was operating in a far less polarized political environment, he doesn’t have the street cred with conservatives he’d need to pull off strategic ambiguity. And that is why criticisms like Suderman’s will stick. 

One last thing about Suderman’s column:

Romney’s tentpole entitlement reform is similarly evasive. He’s promised to cap Medicare spending through a modified voucher system known as premium support, but won’t say how large the vouchers will be, or how fast they’ll be allowed to grow. Given that the primary budgetary benefit from premium support is to restrain the growth of Medicare spending, the plan is effectively useless without this figure. This is Medicare reform with its spine removed.

As I understand Romney’s proposal, which we’ve discussed, he is calling for a defined benefit, i.e., Medicare premium support will be pegged to the existing level of benefits, but private providers will be allowed to compete to offer that benefit. In principle, private providers, particularly in urban areas, will be able to find ways to offer the defined benefit at lower cost over time as they build integrated provider networks that identify new efficiencies, etc. Essentially, this represents a bet that more competition will lower prices, but of course one can’t score a bet. As a conceptually separate matter, one might embrace global budgeting, i.e., we might decide that we are only going to spend X amount of Medicare, regardless of whether or not competition delivers the defined benefit at lower cost. The Domenici-Rivlin Protect Medicare Act aims to reconcile these approaches by offering “competitive bidding on a budget.”

The truth is that we have no idea of what’s going to happen to the budget path, as all of the key variables are uncertain. So I think it is perfectly defensible for candidates to do no more than outline broad principles. Where candidates go wrong is when (a) they get too specific and (b) they overpromise. Suderman is right to criticize Romney for (b). Activists are wrong to demand (a), because they’re failing to recognize that presidents don’t govern unilaterally. 

This larger environment we’ve sketched out helps explain why it is so helpful to have a candidate who speaks to the different components of a coalition. Barack Obama didn’t have to get terribly specific, because he spoke (eventually) to blue-collar minority voters and to affluent social liberals, because they identified with him. They weren’t going to tear him to shreds because he decided that an individual mandate was a good idea after all. Someone like Jeb Bush might have been able to do the same for Republicans this cycle, but we’ll never know. 

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