Romney-Santorum Debt-Control Plans Trail Obama: BGOV Barometer

For all the concern expressed by Republicans about the growth of the national debt under President Barack Obama, his 2013 budget envisions less borrowing than plans from his top rivals, former Massachusetts Governor Mitt Romney and former Pennsylvania Senator Rick Santorum.

The BGOV Barometer shows Obama’s 2013 budget calls for boosting debt held by the public to 77 percent of U.S. gross domestic product by 2021 from a projected 74 percent in 2012. That compares with an increase to 86 percent of GDP for Romney and 104 percent for Santorum, according to an analysis by the nonpartisan Committee for a Responsible Federal Budget.

U.S. marketable debt soared to $10.2 trillion in February from $4.4 trillion at the start of the financial crisis in July 2007. Yields on U.S. Treasuries have fallen during the crisis and subsequent recession, reaching record lows even after the U.S. credit rating was cut by Standard & Poor’s in August.

“My only hope is in the process of campaigning that we can get lawmakers and the president all leaning in one direction to reduce the budget deficit,” said Robert Tipp, chief investment strategist in Newark, New Jersey, at Prudential Financial Inc.’s fixed income division, which oversees $335 billion.

Deficit Swell

Projected U.S. debt would rise under Romney and Santorum because their budget proposals reduce the amount of tax revenue by a greater amount than they cut spending, the CRFB study found. Obama’s budget leaves the nation’s debt in 10 years smaller than Romney’s by $246 billion and by $4.68 trillion versus Santorum’s, according to the committee’s projections.

The CRFB compares Romney’s and Santorum’s budgets with what it calls a “realistic baseline” that would result in debt of 85 percent of GDP in 10 years. The baseline assumes the extension of current policies including tax cuts enacted under President George W. Bush that Obama wants to end for families earning $250,000 or more.

The Republican-led House of Representatives last week adopted a budget resolution that envisions limiting federal debt by cutting government’s share of the economy to a level not seen since 1951, before Medicare, Medicaid, the Environmental Protection Agency and the space program. The budget plan, championed by House Budget Committee Chairman Paul Ryan, a Wisconsin Republican, is forecast to die in the Democratic- controlled Senate.

Ryan, whose home state of Wisconsin holds its presidential primary tomorrow, endorsed Romney for the Republican nomination last week and urged conservatives to “coalesce” around the former Massachusetts governor.

“We need a plan that puts the deficit on a downward path,” said Marc Goldwein, senior policy director with the CRFB. “This needs to be the No. 1 issue in the presidential campaign, and the No. 1 issue that Americans are thinking about, at least domestically,” said Goldwein, a registered independent who worked on the nonpartisan staff of the budget supercommittee created as part of the debt-ceiling extension signed in August by Obama.

To contact the reporter on this story: Daniel Kruger in New York at dkruger1@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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