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Ohio U.S. Senatorial Candidate Spending Analysis – Josh Mandel
October 1, 2012
Ohio U.S. Senatorial Candidate Spending Analysis – Josh Mandel
Total Net Spending Agenda: -$103.897 billion (savings)
Energy, Agriculture, and the Environment: -$301 million (savings)
A. Expand Onshore Energy Production:
“[I would [e]mbark on a pro-American energy policy. We must make energy independence our national mission with an all-of-the-above, free-market strategy to maximize the natural resources with which we have been blessed. …
Common sense solutions … [r]emove barriers to energy exploration. Artificial federal barriers to drilling and refining must be removed.”
“I believe the oil and gas we have in our ground in Ohio and the rest of America are assets, and in a responsible way that protects the air we breathe and the water we drink, I believe we should be drilling for oil and gas.”
“We should be exploring for natural resources here in the United States of America, here in the Utica shale and the Marcellus shale, right here in the state of Ohio.”
“There are some who are trying to convince the country that coal is a liability. In my opinion, it is a blessing.”
Cost: -$301 million (-$1.505 billion over five years) (partial estimate).
Note: Treasurer Mandel has criticized his opponent for opposing “drilling off the coast of New Jersey and California” but NTUF was unable to locate any information on Treasurer Mandel’s website indicating support or opposition to particular offshore energy development proposals.
Government Reform: -$37.35 billion (savings)
A. Cut Discretionary Spending to Fiscal Year (FY) 2009 Levels:
“Common [s]ense [s]olutions … [c]ut spending back to FY 2009 levels. Congress must immediately reduce discretionary spending by $93 billion in FY 2013 to get on a path toward a balanced budget.”
Note: It is unclear whether Treasurer Mandel is calling on the current Congress to “immediately” reduce discretionary spending, or whether he is announcing that he intends to take action to reduce discretionary spending “immediately” upon taking office. Moreover, NTUF was unable to replicate the calculations of savings identified by the campaign. The Budget Control Act of 2011 (BCA, see below) has already enacted some spending reductions and has slowed the rate of budgetary growth. Based on figures in the Budget of the U.S. Government, Fiscal Year 2013: Historical Tables, “Table 8.1: Outlays by Budget Enforcement Act Category: 1962-2017,” additional cuts of $24 billion would be required to roll back estimated total discretionary FY 2013 outlays to FY 2009 levels. According to the budget, defense discretionary outlays will have increased by $36.2 billion from FY 2009 to FY 2013 while non-defense discretionary outlays will have decreased by $12.4 billion. It is unclear how this would be implemented in conjunction with Treasurer Mandel’s agenda item to freeze non-defense discretionary spending (see below). Attempts to clarify this position with the Mandel campaign were unsuccessful.
B. Freeze Non-Defense Discretionary Spending:
“Common [s]ense [s]olutions … [f]reeze non-defense discretionary spending. With fiscal discipline and a growing economy, we can balance the federal budget in less than 10 years without further cuts.”
Note: It is unclear how this proposal would interact with recent policies. On August 2, 2011, the Budget Control Act of 2011 was signed into law. This Act imposed caps to slow (and in some cases reverse) discretionary spending growth over the next several Fiscal Years. Furthermore, given the failure of the Joint Select Committee on Deficit Reduction to agree on a deficit reduction package, the BCA mandates broad-based funding cuts known as “sequestration” to certain discretionary and mandatory programs. Relative to this law, a “spending freeze” could actually increase outlays.
C. Cap Spending at 20 Percent of Gross Domestic Product (GDP):
“Common [s]ense [s]olutions … [e]nact a statutory spending limit. With a hard spending cap of 20% of GDP, Washington politicians would finally need [to] begin making the tough choices needed to get our finances under control.”
Cost: -$37.35 billion (-$74.7 billion over two years).
Source: NTUF assumes that Treasurer Mandel would reduce total outlays as a percentage of GDP by one percent annually, starting with the FY 2014 budget. Related legislation has been introduced in the form of S. 1316 (112th Congress), the One Percent Spending Reduction Act. The bill would enact annual spending caps based on the previous year’s total outlays minus one percent. Each subsequent year, the spending cap is further reduced by one percent until total outlays reach 18 percent of GDP. Payments for debt interest are excluded. The most recent Office of Management and Budget figures (Budget of the U.S. Government, Fiscal Year 2013, Midsession Review, “Table S-1: Budget Totals”) estimate that total outlays for FY 2014 will be $3.83 trillion, or 22.5 percent of GDP. “Table S-14: Federal Government Financing and Debt,” estimates that payments for net interest on the debt will be $276 billion in FY 2014 and $347 billion in FY 2015.
Note: BillTally’s methodology only includes the first two years of spending caps. Additionally, if the economy were to expand significantly, outlays in dollar terms could increase rather than decrease once the percentage-of-GDP element of a spending cap is in place.
D. Scrap the Tax Code:
“Common [s]ense [s]olutions … [s]crap the tax code and start over. Move to a flatter, fairer income tax with only one or two brackets, eliminating almost all of the credits, exemptions and loopholes.”
Note: It is unclear which credits would be eliminated and which would be retained. The impact on outlays of this proposal would depend upon the extent to which “refundable” tax credits (i.e., credits in excess of actual tax liability that can result in outlays) are repealed. The Budget of the U.S. Government, Fiscal Year 2013, Appendix (pages 1103-1110) estimates that for FY 2012 various tax credits that are refundable for personal income tax purposes will result in $82.646 billion of outlays.
E. Moratorium on Federal Regulations:
“Common [s]ense [s]olutions … [s]top all new federal regulations. Place a moratorium on new job-killing federal rules until the economy recovers. …
Reexamine every regulation. Washington must sunset the federal regulations that are currently in place and reexamine each of them to ensure that they are needed, effective, and not cost prohibitive.”
Note: Related legislation has been introduced in the form of H.R. 10 (112th Congress), the Regulations from the Executive in Need of Scrutiny (REINS) Act of 2011. According to CBO’s cost estimate for H.R. 10, “About 80 major rules have been issued per year, on average, over the past five years. Major rules vary greatly in their nature and scope. CBO and the staff of the Joint Committee on Taxation (JCT) cannot determine the budgetary effects of preventing all future major rules from going into effect, but we expect that enacting H.R. 10 would have effects on both direct spending and revenues.”
Health Care: -$66.248 billion (savings)
A. Repeal the Patient Protection and Affordable Care Act:
“Common [s]ense [s]olutions … [r]epeal government-run healthcare. If it is not overturned by the Supreme Court, this legislation must be repealed and Congress must start over with healthcare reform that reduces costs, improves accessibility, and protects the doctor/patient relationship.”
Cost: -$63.9 billion (-$319.5 billion over five years).
Source: Repealing “Obamacare”: A Look Beyond the Media’s Misguided Deficit Focus, National Taxpayers Union Foundation, Issue Brief 164, July 2012.
Note: NTUF’s estimate is based on CBO reports for H.R. 2 (112th Congress), the Repealing the Job-Killing Health Care Law Act, and H.R. 6079, the repeal of Obamacare Act. However, four other introduced bills would repeal the Patient Protection and Affordable Care Act and replace it with alternate reforms. Those bills are H.R. 364, the Common Sense Health Reforms Americans Actually Want Act; H.R. 371, the Health Care Choice Act of 2011; H.R. 397, the Reforms Americans Can Afford Act of 2011; and H.R. 408, the Spending Reduction Act of 2011.
B. Purchase Insurance Across State Lines:
“Common [s]ense [s]olutions … [a]llow health insurance to be purchased across state lines. Increased competition among insurers will reduce prices while protecting quality.”
Cost: $65 million ($326 million over five years).
Source: CBO cost estimate for H.R. 2355, the Health Care Choice Act of 2005 (109th Congress), a bill to amend the Public Health Service Act to provide for cooperative governing of individual health insurance coverage offered in interstate commerce. CBO’s initial cost estimate has been adjusted for inflation. The bill was reintroduced in the 112th Congress in the form of H.R. 346.
C. Permit Association Health Plans:
“Common [s]ense [s]olutions … [g]ive small business owners and individuals the tools they need. Employers should be given the opportunity to reduce healthcare costs through innovative ideas like association health plans, and people should be given the same tax treatment as businesses when writing [sic] their healthcare costs.”
Cost: $7 million ($36 million over five years).
Source: CBO cost estimate for H.R. 525 (109th Congress), a bill to improve access and
choice for entrepreneurs with small businesses with respect to medical care for their employees. CBO’s initial cost estimate has been adjusted for inflation. The bill was reintroduced in the 112th Congress in the form of H.R. 1050.
D. Enacting Medical Tort Reform:
“As Senator, I will fight for market-based solutions that allow patients to choose their doctor without government interference. I will fight to reduce the cost of insurance by increasing competition, encouraging innovative ideas like association health plans and health savings accounts, and reducing junk lawsuits that drive up the cost of everyone’s medical care.”
Cost: -$2.42 billion (-$12.1 billion over five years).
Source: Related legislation has been introduced in the form of H.R. 5 (112th Congress),
the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011. A CBO cost estimate is available.
Note: Health Savings Accounts are personalized, non-taxable savings accounts for individuals’ health-related expenses. Unless the accounts were to be subsidized through “refundable” (i.e., in excess of actual tax liability) credits or a federal matching rate, there would be no effect on outlays. Budgetary agencies classify the refundable portion of tax credits as outlays. However, NTUF is unable to estimate any costs that might be associated with the accounts due to the lack of details in Treasurer Mandel’s proposal.
National Security and International Relations: $2 million
A. Review and Draw Down Bases in Europe and Asia:
“‘We’re not fighting the Nazis anymore, and we’re not fighting the Japanese anymore,’ Mandel … [said]. …
The nation’s ‘main enemy today is radical Islam, and in my mind, we need to draw down a lot of the bases in Europe and Asia in order to save money here in the United States to fund important programs like Social Security and Medicare and pay down the debt,’ he said.
Some bases should be shut down after a review of U.S. military facilities in those three countries is done, he said.”
Cost: $2 million (first-year cost).
Source: The article cited above indirectly quoted Mandel as saying that he would support a review of the current U.S. bases established in Germany, Italy, and Japan and that some should be closed. Most troops would be relocated back to the United States but some would be repositioned in the Middle East. (The text is included as an additional note below.)
NTUF assumes this review would be similar to the process conducted by Defense Base Realignment and Closure (BRAC) Commission. The BRAC Commission submits base closure recommendations to the President who then can send them to Congress for a straight up or down vote. This cost is only for the commission that would be established to conduct the review (these types of commissions are usually funded at approximately $2 million for staff and general expenses).
NTUF is unable to estimate possible future savings that might result from the base review because it is unknown what the specific recommendations would be or whether Congress would approve them. Nor has Treasurer Mandel identified a specific percentage of any resulting savings that he would devote to debt reduction as opposed to “funding important programs.”
Note: “Some bases should be shut down after a review of U.S. military facilities in those three countries is done, he said.
Most soldiers in those countries would return to the United States to serve here, Mandel said.
He also said the United States needs to increase its presence in the Middle East.
‘The place that makes the most sense to me is Kuwait because they’re an ally,’ he said.”
“Common [s]ense [s]olutions … [e]nd taxpayer-funded Wall Street Bailouts. Washington politicians should not have the power to use our tax dollars to pick winners and losers on Wall Street.”
“Our goal must be to reduce the debt ceiling, not raise it. No more debt ceiling increases without real spending reform.”
“No budget ... no pay! The non-partisan group “No Labels” and members of Congress have advanced a good idea in saying if you don’t pass a budget, you don’t get paid.”
“Balanced Budget Amendment. Let the American people have the opportunity to limit the Washington politicians’ ability to spend like there is no tomorrow.”
“[I would] [e]liminate the death tax. Permanently.”
“[I would] [h]elp job creators. Reduce capital gains and corporate taxes, and allow for a small business income deduction.”