Endnotes and citations are available in the PDF version of this testimony.

Thank you for inviting me here today to discuss the Maryland Secure Choice Retirement Savings Program.

My name is David Madland and I’m the Director of the American Worker Project at the Center for American Progress Action Fund, an independent, nonpartisan, and progressive education and advocacy organization dedicated to improving the lives of Americans through ideas and action.

I appreciate the opportunity to present my views on this important topic, a topic about which I have been researching for some time. I have written extensively in academic and popular publications about retirement policy, and am also the author of a proposal for a new private-sector retirement plan type called the Collective Defined Contribution, which shares many features with the proposal in front of you today.

In my testimony I will discuss the many problems of our current private-sector retirement system and how the proposed Secure Choice Retirement Savings Program would help alleviate these problems.

Social Security provides an essential baseline of income for retirees, and must be strengthened to ensure that it continues to do so for generations to come, as the Center for American Progress has proposed. However, Social Security was only intended to be one leg of a three-legged approach to retirement savings. Employer-sponsored retirement plans and individual savings are supposed to be the two other legs.

Unfortunately, the private-sector, workplace retirement system is broken. As the first generation to rely primarily on 401(k) plans begins to retire, we can see the cracks in the system. Boston College’s National Retirement Risk Index estimates that 53 percent of households are at risk of having an insecure retirement, meaning they will be unable to maintain their preretirement standard of living.

And the public has recognized this and are deeply concerned about their ability to retire. Fifty-five percent of Americans are very concerned that current economic conditions are affecting their ability to achieve a secure retirement, according to a new report by the National Institute on Retirement Security released last week. An additional 30 percent are concerned—meaning that 85 percent of Americans are concerned about being prepared for retirement.

The current system is failing in a variety of ways including a lack of coverage, high costs, and high levels of risk for savers. I’ll now turn to each of these issues and discuss how the Maryland Secure Choice Retirement Savings Program and similar plans, such as CAP’s collective defined-contribution plan, would alleviate these problems.

Coverage

The first major problem the Secure Choice plan would address is coverage. Our current workplace retirement system allows too many workers to fall through the cracks. According to Center for Retirement Research analysis of Federal Reserve data, more than half of all workers are not covered by an employer-sponsored pension, either defined benefit or defined contribution.

Some might respond that plans that allow workers to save without an employer-sponsored plan can solve this problem. Only 5.4 percent of workers ages 21 through 64 made contributions to traditional Individual Retirement Accounts in 2009, despite 20.8 percent workers in that age group owning IRAs.

The Secure Choice plan and the CDC plan would help alleviate this problem by having automatic enrollment of workers. The deduction would be opt-out, meaning workers could choose not to contribute if they like. The opt-out model has been a success with research finding that between 85 percent and 90 percent of workers stay in the plan. The employer’s role would merely be to deduct a certain percentage of each worker’s pay and send that contribution to the retirement plan.

Costs

Excessive retirement plan costs are the second major problem that the Secure Choice plan would address. High fees and poor investment returns make saving for retirement far more costly for most workers than it should be.

The Secure Choice plan would have professional fund management—ensuring a balanced portfolio and a patient investment strategy—as well as low fees to help participants accumulate significant assets.

Professional money managers may have a hard time beating market averages, but they do much better than individual investors by avoiding common investing mistakes—such as failing to diversify. Secure Choice Retirement plans would also have higher returns due to the collective pooling of assets. Individuals need to become more conservative with their investments as they age, but the continued entrance of younger workers into the investing pool of the Secure Choice plan allows the fund to maintain a balanced portfolio over a long period of time, increasing returns. The increased returns from this phenomenon, known as intergenerational risk sharing, can raise pension returns by approximately 1.5 percentage points a year according to one study.

High fees in retirement plans can eat away up to one-third of the total accumulations in a workers account. Typical fees for a 401(k) plan are around 1 percent—and commonly much higher in plans with only few participants. These high fees can reduce employee savings by 30 percent. Fees for Individual Retirement Accounts are typically even higher than in a 401(k). In contrast, large investment pools such as the Secure Choice plan can have much lower fees: The federal Thrift Savings Plan, the defined contribution retirement plan for federal employees, has fees of only 0.0185 percent of assets.

All of these factors combined means that achieving retirement security would be much cheaper for a participant in a collectively managed fund, like the Secure Choice plan, compared to a participant in an IRA or 401(k).

Risk

The final problem the Secure Choice plan would help address is the excessive risk born by IRA and 401(k) participants, such as the possibility the participant will outlive their savings or suffer a significant drop in the value of their account just as they are about to retire.

The Secure Choice plan would increase the security of retirees by providing a steady stream of income in retirement that cannot be outlived. Savers in an individual plan often don’t have access to such an annuity. Only one in five 401(k) plans offer an annuity plan. Even if a saver purchases an annuity herself, the costs are often quite high and could skyrocket if interest rates drop when she retires. The group nature of a collective savings program would protect against these types of risks.

Similarly, savers in a 401(k) plan or any individual defined contribution are unnecessarily exposed to the risk that a large market crash happens just as a worker is about to retire. The typical near-retirement age worker saw their account balances drop by 17.4 percent on average between December 2007 and June 2009—the duration of the Great Recession. For many savers, this meant that they faced a lower standard of living in retirement, or the need to continue working past expected retirement age.

Collectively managed plans spread this kind of timing risk out so that no individual saver is on their own during a market downturn—by withholding some of the upside during bull markets to make smooth out returns in bear markets. By spreading out the risk of a market downturn, collective retirement plans help workers better cope with the risks of retirement.

Conclusion

Plans like Secure Choice would be a much-needed improvement over the current private-sector retirement system. This plan would expand coverage, reduce costs, and better handle risk than 401(k) plans. We strongly support plans that share the features listed above, such as automatic enrollment, low costs, professional management, and collective savings.

Not surprisingly, the public supports efforts such as these to boost retirement security. In a National Institute on Retirement Security survey, 78 percent of the public said the government should facilitate a pension program that small employers or individuals can join and invest in.

Making the Maryland Secure Choice Retirement Savings Program law would go a long way toward making retirement more secure in Maryland, and would serve as a model for the nation.

David Madland is the Director of the American Worker Project at the Center for American Progress Action Fund.

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SOURCE: AP/Steven Senne

Republican presidential candidate and former Massachusetts Gov. Mitt Romney addresses a crowd at a campaign event in a metal working shop, in Broomall, Pennsylvania, Wednesday, April 4, 2012.

In an Iowa speech last week billed as a “major economic address,” Republican presidential candidate and former Massachusetts Gov. Mitt Romney touted his economic stewardship of Massachusetts as evidence of his qualifications to take over the national recovery set in motion by President Barack Obama. “Our state moved up 20 places in job growth,” Gov. Romney said. “We worked to make our state business-friendly.”

An analysis of the private-equity-mogul-turned-politician’s economic record in Massachusetts paints a far less impressive picture. Here’s the truth about Gov. Romney’s Massachusetts leadership from 2003 through 2007, according to data from the U.S. Bureau of Economic Analysis:

• The Massachusetts economy grew more slowly than the rest of the country under Gov. Romney.
• The Massachusetts economy under Gov. Romney never reached 2 percent annual growth—not even half the 4 percent growth rate he claims his current jobs plan will attain.
• If Gov. Romney had managed to grow the state’s economy at 4 percent a year, its output would have been 10.3 percent greater at the end of his term.
• The economic output of the Massachusetts economy would have been a full 5 percent greater if Gov. Romney had only managed to grow his state at the same rate as the rest of the country.

The graph below depicts Gov. Romney’s middling performance as chief executive of the Massachusetts economy. It’s clear why he has been more comfortable touting his leadership at Bain Capital—which at least made him and his partners rich, even though it outsourced American jobs and laid off American workers—than his term as head of state. Gov. Romney’s governorship leaves little to brag about. (see Figure 1)

For more new analysis of Gov. Romney’s economic record in Massachusetts, see economist Robert Lynch’s new Baltimore Sun op-ed about the Republican businessman’s job-creation track record in the Bay State. Lynch compares Gov. Romney’s record with that of President Obama and finds the former with a far weaker performance creating private-sector jobs, despite the president inheriting a far worse-off economy.

Christian E. Weller is a Senior Fellow at the Center for American Progress Action Fund. Sam Ungar is a Special Assistant on the Economic Policy team at the Action Fund.

SOURCE: AP/Charles Dharapak

Republican presidential candidate Mitt Romney pauses during a campaign stop at Worthington Industries, a metal processing company, in Worthington, Ohio, Thursday, October 25, 2012.

One of the 270 phrases the “Teen Talk Barbie” once uttered was, “Math class is tough!” Republican presidential candidate and former Massachusetts Gov. Mitt Romney apparently believes every child in America (along with their parents and grandparents) took this to heart back when the talking doll was released in 1992. How else to explain his clear conviction that voters can’t do the basic arithmetic on his fantasy tax and jobs plans?

That’s the only conclusion I can draw from the fact that in a live, nationally televised debate, Gov. Romney told the American people that “My number one principle is there will be no tax cut that adds to the deficit,” and “I will create—help create 12 million new jobs in this country with rising incomes.”

This is nonsense. The Economic Policy Institute recently completed some new analysis to include Gov. Romney’s claim from the first presidential debate that he will lower the rate but not add to the deficit. Gov. Romney should read their report. They find that if he follows his own plan and implements his own revenue-neutral criteria, the economy will shed about 1.1 million jobs in 2013 and lose nearly an additional 1.8 million in 2014.

This bears repeating: Not add 1.1 million jobs next year, but lose 1.1 million. That would be a whopping 2.9 million fewer jobs that we’ve had in the past 12 months.

So let’s walk through the math. First, Gov. Romney clearly articulated that his economic plan would be to “make permanent, across-the-board 20 percent cut in marginal rates” but that this will not add to the deficit. It will be what economists call “revenue neutral.”

This leads us to our first math problem: How can we lower the tax rate, but have it be revenue neutral? Answer: by raising taxes. If the marginal tax rate is lowered by 20 percent, but this is revenue neutral, then taxes must rise somewhere by enough to cover that 20 percent tax cut. That’s just math.

Now, the trick is that Gov. Romney hasn’t told us where he would raise taxes, but he’s been heard all across America telling people that the tax increase won’t fall on them. The reality is that either someone’s taxes will go up or the federal budget deficit will indeed rise.

Let’s recall where we’ve heard this story before. President Ronald Reagan told us that if we lowered the rate of taxation, the resulting economic growth would be so fast that the revenues would increase sufficiently to make up for the lower rate. As Gregory Mankiw, chair of the Council of Economic Advisers under President George W. Bush, wrote in his textbook Principles of Macroeconomics, this was a classic example of “fad economics,”  concluding, “when politicians rely on the advice of charlatans and cranks, they rarely get the desirable results they anticipate.”

Mankiw and his textbook are right. “After the 1980 presidential election, Congress passed the cut in tax rates that President Reagan advocated, but the tax cut did not cause tax revenues to rise.” Tax revenue fell and this resulted in the “largest peacetime increase in the government debt in U.S. history.” Ironically, Teen Talk Barbie was released after Reaganomics nearly tripled U.S. debt (in nominal dollars), so maybe her manufacturer, Mattel, Inc., was concerned that little girls weren’t taking enough math.

But let’s turn to the second math problem. Gov. Romney claims he will create 12 million jobs, 7 million of which will be generated by his revenue-neutral tax cuts. So how can we create 7 million jobs through revenue-neutral tax changes? Answer: We can’t.

In a white paper outlining his economic platform, “Believe in America: Mitt Romney’s Plan for Jobs and Economic Growth,” Gov. Romney offers a 59-point plan to create jobs and lower unemployment. The Center for American Progress Action Fund went through this 59-point plan and, by a conservative tally, found that the plan would actually cost the economy about 360,000 jobs in 2013 alone.

Now, that’s pretty bad. But the story may be far worse. The Economic Policy Institute’s new analysis of Gov. Romney’s claims sees the economy shedding about 1.1 million jobs in 2013 and even more in 2014. This compares to the economy creating 1.8 million jobs in the past year under President Obama.

President Bush also claimed he could grow the economy if Americans would agree to slashing taxes on the rich. In 2001 Glenn Hubbard, chairman of President Bush’s Council of Economic Advisers, predicted that tax cuts for the richest Americans would “quickly deliver a boost to move the economy back toward its long-run growth path.”

Now, it’s also just math to look at what happened after the Bush tax cuts. Our economy experienced its worst record for growth in investment, employment, and incomes in half a century—devastating our middle class.

All of this math speaks for itself, but not so for “Teen Talk Barbie.” Mattel was forced to recall the math-adverse Barbie, and rumors are that only a few remain. Hopefully, Gov. Romney’s bet that Americans took her seriously will be wrong.

Heather Boushey is a Senior Economist at the Center for American Progress Action Fund.

SOURCE: AP/Rick Wilking

Republican presidential nominee Mitt Romney speaks during the third presidential debate at Lynn University, Monday, October 22, 2012, in Boca Raton, Florida.

Up until the final presidential debate in Florida Monday night, Republican presidential candidate and former Massachusetts Gov. Mitt Romney’s words about China had been almost universally hostile.

He repeatedly called China a “cheater” on the stump, warned that Beijing could be harboring ambitions of “building a global alliance of authoritarian states,” and opined that “a China that is a prosperous tyranny will increasingly pose problems for us, for its neighbors, and for the entire world.” He offered a distinctly zero-sum view of the relationship, suggesting this century would have to be either American or Chinese. Aaron Friedberg, one of his chief Asia advisors, wrote, “Given the repressive and secretive character of the current regime, it is important to be realistic in our expectations about what can be achieved. China’s rulers are determined to retain their exclusive grip on political power.”

But in Monday night’s debate, Gov. Romney changed his tune entirely. On the stage with President Barack Obama, he asserted that the United States can be a “partner” with China and that “we don’t have to be an adversary in any way, shape or form.” He added that “we can work with them, we can collaborate with them, if they’re willing to be responsible.”

Of course it’s better late than never to realize that the U.S. relationship with China has both cooperative and competitive elements. But it still leaves us wondering who the real Mitt is.

Unfortunately, Gov. Romney is hanging on to his former China hawkishness in one very ill-advised way. Once again during the final debate, Gov. Romney vowed, “on day one I will label [China] a currency manipulator.”

Three Treasury secretaries under President George W. Bush refrained from taking this action, as has the Obama administration—no shrinking violets when it comes to taking the Chinese to task. Members of Gov. Romney’s own party, policy experts, U.S. business interests, and media analysts have all given a thumbs down to Romney’s idea, as we detail below.

Republicans and conservatives

Sen. Marco Rubio (R-FL) claimed, “I believe that a trade war is not the right way to approach it, and I think that if you label them a currency manipulator, that’s what it may result in. It will hurt American businesses.”

Another prominent Republican, Ambassador Jon Huntsman, claimed, “What he is calling for would lead to a trade war. It makes for easy talk and a nice applause line but it’s far different from the reality in the U.S.-China relationship.”

Policy experts

Ted Bromund, senior research fellow at the Heritage Foundation, also disputed Romney’s enthusiasm for the label of currency manipulator, “when in reality [currency manipulation’s] contribution to China’s trade surplus with the US is non-existent.”

Arvind Subramanian of the Peterson Institute of International Economics described of the label, “The economic credibility of that action would be pretty thin. Moreover, it would be blatantly provocative at a time when the new leadership was getting in place in China, and the new administration as well.”

Doug Guthrie, dean of the George Washington University School of Business, wrote in Forbes, “As a smart and savvy international business leader, he must know what he’s saying is misleading if not outright false.”

Kenneth Lieberthal from the Brookings Institution argued in Foreign Policy magazine:

Romney’s one serious mistake was in reiterating his determination to declare China a “currency manipulator on Day 1.” This is a campaign position that makes no sense. First, the governor is 4-5 years too late — at 2.1 percent of GDP for the first half of 2012, China’s current account surplus is well below the 4 percent level that the United States argues should be the global standard for what is troubling. Second, dozens of countries, including Switzerland and Israel, use government action to influence the value of their currency — but the United States has never declared any of them to be a “currency manipulator.” Third, the designation is gratuitous. All it would mandate is that the United States engage in intensive negotiations with China on its currency policy, something America has done for years. This designation does not increase the president’s authority to impose tariffs. Fourth, contrary to the governor’s assertion, China’s incoming new leader, Xi Jinping, will feel compelled to take strong countermeasures if Romney approves this designation. Xi will feel he must show Romney that this is a very bad way to elicit Chinese cooperation; he also must show his own countrymen that he will not begin his term by caving in to U.S. bullying. The risk of a trade war developing out of this gratuitous action is thus very real. By any reasonable cost-benefit calculation, “designating China a currency manipulator on Day 1” is a big loser.

And Paul Krugman, New York Times columnist and winner of the Nobel Prize in economics, wrote, “this is an issue whose time has passed,” and described the label as “bluster aimed at making voters think you’re tough.”

U.S. business interests

The U.S. Chamber of Commerce officially opposes the Romney pledge. COO and Executive Vice President David Chavern claimed in September, “Picking fights with trading partners probably isn’t the best way to have expansion of the global trading system.”

Maurice “Hank” Greenberg, former chairman of AIG, also believed that Gov. Romney would reverse this position. He claimed, “Do you want China to be an enemy or a friend? We have a choice between a trade agreement or a trade war. I choose a trade agreement, and I hope that we will.”

Media analysis

Colin Moreshead, contributor to Business Insider, wrote:

Perhaps his most unequivocal statement of the evening was his pledge to label China a currency manipulator on his first day in office — an act he claims is long overdue. The governor’s foreign policy advisors do not seem concerned with the possibility that striking back at a Chinese economy already in slowdown could have severe ramifications for the United States, and Europe in particular.

Stephen Roach, senior fellow at Yale University and former chairman of Morgan Stanley, blasted Gov. Romney’s declaration toward China in Financial Times, warning: “Bad dreams can – and have – become reality.” Roach projects in detail how U.S.-China relations would proceed from “day one”: Negotiations would stall and eventually fail; the United States would impose immediate 20 percent tariffs on Chinese goods, and Beijing would see the move as economic warfare. This would result in stagflation, serious pressure on the stock market, a plunge in the value of the dollar, and staggering unemployment by the fall of 2013.

By that time in the projection, he describes, “As the global economy slipped back into recession, the Great Crisis of 2008-09 suddenly looked like child’s play. Globalisation itself hung in the balance.”

TIME magazine correspondent Michael Schuman calls the currency manipulator label “the most misguided statement on China” from either presidential candidate. He explains:

Sticking such a tag on China will very likely cause Beijing to retaliate with measures aimed at keeping American goods out of the hands of increasingly wealthy Chinese consumers — something U.S. companies, suffering from feeble economic growth at home and in other markets, can’t afford to have happen right now. If the “manipulator” label ends up resulting in punitive tariffs on Chinese goods imported into the U.S., the prices of those goods will increase for American consumers, further straining the wallets of a workforce already strained by debt and joblessness. Suppressed consumption in the U.S. won’t do any good for American retailers or the many U.S. companies that manufacture their products in China for sale at home.

A Wall Street Journal editorial criticized Romney even further:

Most disappointing was his continuing insistence that he will label China “a currency manipulator” on day one so he can then levy tariffs. If he does do that on day one, what then? Does he think China won’t respond in kind? Or perhaps he thinks the two countries can default to negotiations that will end with a whimper. But having promised voters so forthrightly and so often that he’ll get tough with China, he might find that some voters feel betrayed. This is all bad enough as trade and monetary economics, but Mr. Romney may also be backing himself into a political corner.

And last but not least, a Washington Post editorial claimed that “when Mr. Romney promises to declare China a currency manipulator, he is pledging to escalate a battle that the Obama administration is fighting reasonably well, if less dramatically.”

Conclusion

Gov. Romney has changed so many of his stances since winning the Republican primary that it is quite a triumph of politics over substance that he has chosen to stick with the one policy idea that has been so thoroughly discredited. Either Gov. Romney is being insincere when he says he wants “a great relationship” with China or he is being insincere in affirming that he will carry out this pledge (as our colleague Adam Hersh suspects). Either way, it’s not smart foreign policy.

Nina Hachigian is a Senior Fellow at the Center for American Progress Action Fund. Kimberly Aagaard is an intern with the National Security and International Policy team at the Action Fund.

SOURCE: AP/Alan Diaz

President Barack Obama holds up a copy of his plan for jobs as he speaks to supporters during a campaign stop in Delray Beach, Florida, Tuesday, October 23, 2012.

The economic plan that President Barack Obama released yesterday—to create jobs and strengthen the middle class—reflects a full-throated embrace of an argument the president has been developing over the past year: Economic growth is driven by a strong middle class, not by the rich. The evolution of the president’s economic argument reflects a growing recognition in the economics profession of the importance of the middle class in producing economic growth—a recognition that Center for American Progress papers, conferences, and events were a key part of developing.

The president’s economic plan argues that “our economy begins with a strong, thriving middle class,” and presents the dozens of concrete policy proposals for his second term as geared toward “building an economy from the middle out.” With this plan the president most concretely links his governing agenda to the theory of economic growth he has been developing over the past year, as the timeline below shows.

By connecting economic theory to policy, the president has laid out a platform that can guide not only his second term—if he is re-elected—but also the progressive movement in the years to come.

David Madland is the Director of the American Worker Project at the Center for American Progress Action Fund. Gadi Dechter is the Managing Director of Economic Policy at the Action Fund.

SOURCE: AP/David Goldman

Republican presidential nominee Mitt Romney makes a point during the third presidential debate with President Barack Obama at Lynn University, Monday, October 22, 2012, in Boca Raton, Florida.

The basic math behind Republican presidential candidate and former Massachusetts Gov. Mitt Romney’s tax and jobs plans isn’t the only thing that doesn’t add up. Neither does his posture on China, which he doubled down on in last night’s final presidential debate.

Gov. Romney pledged again last night that “on day one I will label them a currency manipulator.” But everything about him says he’s all bark and no bite on the real policy actions needed to redress the critical damage wrought by China’s exchange rate on American workers and exporters. Here’s why.

For starters, the former Massachusetts governor surrounds himself with people opposed to getting tough on China. His new economic policy director lobbied for Wall Street against a law to get tough on China’s exchange rate. His choice for vice president, Rep. Paul Ryan (R-WI), voted in 2010 against a law to crack down on Chinese currency manipulation.

Another reason to doubt Gov. Romney’s convictions: China’s undervalued exchange rate inflates profits for his corporate executive and hedge fund colleagues by boosting job-displacing exports to the United States. These are the people supporting his campaign and the people whom Gov. Romney erroneously believes are the key to America’s economic strength.

By selling the renminbi to buy dollars, China bids its currency down and the U.S. currency up, sapping jobs and manufacturing from the U.S. economy. Despite rising considerably since 2005, most estimates find China’s exchange rate is still roughly 30 percent undervalued. The resulting trade imbalances destabilize both the U.S. and Chinese economies. U.S. policy needs to prioritize raising China’s exchange rate but Gov. Romney is not going to do this.

Consider the economics. China’s undervalued exchange rate in essence provides an across-the-board subsidy to goods produced there and sold in the U.S. market.

But that’s not all an undervalued exchange rate does. It also undervalues Chinese assets and labor costs in the eyes of foreign investors. Thanks to China’s exchange rate policy, the factories in China and the workers that power them are perpetually on sale for U.S. corporations that want to relocate production there and capitalize on global supply chains based out of China.

It doesn’t take a shrewd businessman like Mitt Romney to see that buying factories and workers on the cheap in China and selling what they manufacture for overvalued U.S. dollars means big profits for those willing and able to take advantage of this situation. Getting tough on China’s exchange rate would cross interests with many large U.S. business interests who are profiting from this deal—including one man The Washington Post named a “pioneer” of such dealings: Mitt Romney.

The flipside of this arrangement is that goods produced in the United States by American workers are commensurately overvalued and less competitive in China and elsewhere in global markets where China competes with U.S.-based export businesses. And China’s exchange rate policy is not the only thing that has enticed American businesspeople like Mitt Romney to move their business operations to China at the expense of people in the United States. Loopholes in the U.S. corporate tax system provide incentives for companies to relocate production overseas, where they can hold their profits indefinitely to avoid paying taxes they owe.

Gov. Romney’s tax plan would exacerbate this incentive for offshoring and reward such behavior with a tax amnesty.

China is also investing heavily in educating the productive workforce of the future and building the advanced infrastructure that allows people, goods, and ideas to move around more efficiently in the economy. Technology parks connected to transportation hubs are popping up all over China, providing foreign and domestic businesses an efficient platform from which to compete. Gov. Romney’s fiscal plans, reflected in the Ryan-Republican budget he embraces, would actually disinvest in these and other growth-enhancing public goods in the United States just when China is ramping up its own investments.

This can only make sense from Gov. Romney’s perspective: Why should a 1 percenter pay U.S. taxes to invest in such public goods in America when they can use China’s for free?

On China’s side of the exchange rate arrangement, the policy has undoubtedly helped fuel economic growth, create jobs, and raise the standard of living for millions of people. Still, rapidly rising inequality shows how most of the benefits from this policy are accruing to Chinese authorities and their business cronies—China’s 1 percent. These are the people with whom Gov. Romney and his business supporters shake hands when they seal a deal to move jobs overseas.

China’s 1 percenters are also the gatekeepers to the sweet deal that footloose multinational businesses have going with China’s exchange rate. Anything more than tough talk on China’s “currency manipulation” is a surefire way to end this profitable game for the “job creators” Gov. Romney holds so dear.

Bottom line: There’s no reason to believe that Gov. Romney’s talk on China is anything more than campaign bluster calculated to score political points. If the Republican presidential candidate truly believed in getting tough on China, he would have put his money where his mouth is long ago.

Adam Hersh is an Economist with the Center for American Progress Action Fund.

SOURCE: AP/Mary Altaffer

Gov. Mitt Romney speaks during a campaign event at the NASCAR Technical Institute in Mooresville, North Carolina

View infographic: “The Real Cost of the Romney-Ryan Plan to North Carolinians.”

View infographic: “Mitt Romney’s Dangerous Agenda for North Carolina Women and their Families.”

Endnotes and citations are available in the PDF version of this issue brief.

Behind dramatically different economic visions and a deluge of attack ads, this election comes down to numbers. Many North Carolinians—and many families across the United States—are asking what this will mean at the kitchen table. What will be the cost of a second term of President Barack Obama and Vice President Joe Biden or a first term led by former Massachusetts Governor Mitt Romney and his running mate, Rep. Paul Ryan (R-WI)? The answer is that, in concrete and quantifiable ways, a Romney-Ryan presidency would mean higher taxes for the middle class, out-of-pocket health expenses for current seniors, fewer college loans and fewer health care options for young people, and the reintroduction of corporate outsourcing tax loopholes that have sent so many jobs overseas.

The nonprofit organization, the Center for American Progress Action Fund, examined the economic and tax agenda of Gov. Romney and Rep. Ryan, taking a close look at how their policies would affect the way North Carolinians live and work. The price tag includes:

• Middle-class North Carolinians would pay more in taxes while millionaires pay less. Millionaires in the state would receive an additional $87,000 in tax breaks under the tax plans of Gov. Romney and Rep. Ryan while middle-class families would pay up to $2,000 more in health care taxes and $1,066 more in taxes on their mortgages.
• Jobs would decline across North Carolina. Gov. Romney and Rep. Ryan plan to provide extra tax incentives for corporations to outsource jobs and are pushing policy proposals to cripple the clean energy industry, jeopardizing 77,000 jobs across the state.
• Drastic cuts to federal spending would shrink North Carolina’s middle class. The state stands to lose more than $71.4 billion in federal funding from 2013 through 2022, an average of more than $7.1 billion a year, from cuts to schools, law enforcement, highway repairs, job-training programs and more. These cuts would fall predominantly on middle-class and low-income families, especially cuts to education programs that would result in nearly $216 million in reduced federal support for education and job training in the state in 2013 and $499 million in 2014 alone.
• Seniors in North Carolina would lose health care benefits and pay more. Gov. Romney and Rep. Ryan would force seniors in the state to pay at least $585 more for their prescription drugs each year—almost 55,000 North Carolina seniors have already saved more than $131 million. At the same time, the Romney-Ryan plan to turn Medicare into a voucher would cost current seniors at least $11,000 more out of pocket.
• Women in North Carolina would pay more for health care but receive less bang for their buck. Gov. Romney and Rep. Ryan would once again allow insurance companies to charge women more than men while taking away preventive care from 1.3 million women in the state.
• Young adults in North Carolina would lose access to their families’ health insurance. Gov. Romney and Rep. Ryan promise to dismantle Obamacare, which would directly result in 95,000 young adults in North Carolina losing the insurance they have today due to the Affordable Care Act.

The Romney-Ryan plan asks the vast majority of Americans to pay more, and then spends this revenue not on balancing the budget but rather on more tax breaks for the richest Americans. Gov. Romney’s top direct donor would receive over $2 billion in direct tax benefits from under the Romney-Ryan plan, while a typical police officer in Charlotte earning $46,760 a year and would see their taxes increase by $1,700. These lopsided priorities are not a coincidence or a cruel joke. They are the logical extension of a trickle-down economic policy that failed under President George W. Bush but would be revived by Gov. Romney and Rep. Ryan.

President Obama and Vice President Biden, in contrast, believe that economic growth comes from a strong middle class, rather than being passed down from the wealthiest. They have passed and seek greater investments in education, job-training, infrastructure development, and scientific research and development to boost our nation’s long-term economic competiveness, coupled with targeted cuts in government spending and the end of the Bush-era tax cuts for the wealthiest Americans to bring the federal budget deficit under control.

The Republican contenders for the White House have tried to avoid details, but have nonetheless gone on the record with proposals that have enormous consequences for the economy, taxes, women’s health, health care, and energy security. The Center for American Progress Action Fund believes facts should matter in elections because they will certainly matter to families trying to live the American Dream. This report outlines the real cost of Romney-Ryan policies to North Carolinas.

It is tempting for people across North Carolina to start tuning out the election, defined too often by gaffes and thirty-second sound bites. But behind the politics are deep policy differences with profound consequences for the middle class.

Middle-class North Carolinians pay more in taxes while millionaires pay less

The linchpin of the economic strategy championed by Gov. Romney and Rep. Ryan is to further enrich the wealthiest by doubling down on conservative, top-down tax policies. Those tax policies—even more top heavy than those implemented by President George

W. Bush, which led to the weakest job creation in the post-war era despite giving the richest Americans massive tax cuts—would further fuel the single biggest factor driving up our national debt. Gov. Romney proposes approximately $5 trillion in new tax cuts on top of the cost of extending all of the Bush-era tax cuts.

But instead of learning the lessons from past failed policies, Gov. Romney’s plan is to provide the wealthiest individuals and corporations with additional tax breaks, while asking the middle class, seniors, and students to pay even more. Here’s how the Romney-Ryan tax plan would affect North Carolinians.

Raising taxes on middle-class North Carolina families

The tax plan of the two Republican candidates gives massive tax cuts to the richest Americans and corporations while purporting to collect the same amount of revenue as our current tax policies. The only way his plan adds up is by raising taxes on middle-class families in North Carolina and throughout the country. The nonpartisan Tax Policy Center found that Gov. Romney’s tax plan would require raising taxes on middle-class families with children who have incomes under $200,000 by an average of $2,000 per family. It would raise the average tax bill for all middle-class taxpayers by $500.

Their tax plan would raise taxes on low-income and middle-class families by forcing deep cuts in tax benefits such as the child tax credit, the mortgage interest deduction, the exemption for employer-provided health benefits, and the deduction for state and local taxes. Though Gov. Romney and Rep. Ryan repeatedly refuse to say which specific tax breaks they would eliminate or reduce, the Tax Policy Center calculates that these major tax benefits for middle-class families would have to be reduced by 58 percent to pay for his tax cut for the rich. That 58 percent cut does not even account for the fact that middle-class taxpayers would be forced to pay for the $1.1 trillion corporate tax cut also championed by the Republican ticket.

Here is how this hidden part of the Romney-Ryan tax plan would affect low-income and middle-class families in North Carolina:

• 4.4 million. The number of families in the state that rely on health insurance from their employer, which is currently not taxed.
• $1200–$2000. The amount those middle-class families would pay in higher taxes if the exemption for employer health insurance is reduced by 58 percent.

• 1.1 million. The number of middle-class families in the state that file for the mortgage interest deduction on their federal taxes.
• $1,066. The average loss in mortgage interest deduction for middle-class families in the state if the deduction is cut by 58 percent

• 1.3 million. The number of middle-class families in the state that deduct state and local taxes from their federal income taxes.
• $670. The amount on average that middle class families in the state will pay in higher taxes if the deduction for state and local taxes is cut by 58 percent.

• 746,000. The number of middle-class families in the state that benefit from the child tax credit.
• $580. The amount that families in the state will pay in higher taxes per child if the child tax credit is reduced by 58 percent.

• 200,000. The number of low-income and middle-class families in the state that claim the child care tax credit (in addition to the child tax credit detailed above).
• $318. The amount that families in the state will pay in higher taxes per child if the child care tax credit (in addition to the child tax credit detailed above) is reduced by 58 percent.

• 1.7 million. The number of low-income working families in the state that qualify for the earned income tax credit or the refundable portion of the child tax credit.
• $894. The tax increase for more than 523,000 of those families (with a total of 1.1 million children) would pay on average if the improvements to those tax credits passed under President Obama are rolled back, as the Romney-Ryan plan proposes.

• 250,000. The number of middle-class North Carolina families and students paying for college educations that use President Obama’s American Opportunity Tax Credit.
• $1,800. The average benefit these families and students receive from the American Opportunity Tax Credit. The Romney-Ryan tax plan would eliminate this credit, leaving families in the state with no credit or a less valuable tuition credit.

All these tax hikes on low-income and middle-class families would come courtesy of the Romney-Ryan tax plan’s overarching emphasis on providing even more tax breaks to the top income earners in our country. Their plan would force middle-class families to pay more in taxes than they do today so that the richest among us pay less.

The bottom line for North Carolinians: The 4,907 millionaires in the state would see an additional tax cut of at least $87,000. The total costs for these tax cuts for all the citizens of the state would be at least $427 million.

Jobs would decline across North Carolina

Gov. Romney famously argued that we should have “let Detroit go bankrupt,” never mind the consequences for workers. The Romney-Ryan plan takes the same approach to job creation, which would be devastating to our economy and the lives of tens of millions of Americans. The Romney-Ryan plan for job creation is so out of touch with what’s best for our country because it relies on the same top-down economics that created the worst job growth in decades under President George W. Bush.

Gov. Romney and Rep. Ryan claim they will create 12 million new jobs by the end of 2016, the end of their presumptive first term.²³ In fact, their proposal would kill 360,000 jobs next year alone. Most telling, their plan includes even greater tax incentives for outsourcing that would actively undermine U.S. employment, leading to 800,000 more jobs being created in foreign countries.

Here’s what it would mean for North Carolina.

Letting the auto industry go bankrupt

The auto industry is vital to the health of our economy. President Obama’s decision to save the U.S. auto industry prevented the immediate loss of over 1 million American jobs across the country.

And now the auto industry is roaring back. General Motors Co. is once again the largest automaker in the world. The industry in total has added over 236,000 jobs since June 2009. In addition, another 18,000 jobs are projected to be created in North Carolina specifically because of new fuel economy standards finalized last month. The Romney-Ryan campaign denounced the standards, which will save the average American family $8,000 once fully implemented, as “extreme.”

How clean energy helped power new jobs in the state

Gov. Romney and Rep. Ryan present a clear vision for America’s energy future. They want more lucrative tax breaks for Big Oil companies and their allies while slashing investments in clean energy technologies that create U.S. jobs and keep the United States competitive in the global marketplace.

Instead of investing in the growing clean energy economy and acknowledging the benefits of clean energy to North Carolina’s economy and health of its residents, the Romney-Ryan clean energy plan attacks the industry and undermines its growth, calling green jobs “illusory.”

There are more than 77,000 green jobs in North Carolina, according to the U.S. Bureau of Labor Statistics, and nationwide the sector employs more than 3 million Americans.As one of the nation’s top consumers of electricity, North Carolina would benefit immensely from exploring renewable energies. Specifically, North Carolina has high wind power potential off its Atlantic Coast. There are over 1,000 wind industry jobs in the state, along with 18 manufactures of wind energy components.

Wind is not the only clean energy source that is helping North Carolina’s economy. There are 112 solar companies operating in North Carolina. The state ranks 7th among states for installed solar capacity. There is currently enough solar power being produced in North Carolina to power over 8,400 homes. The Romney-Ryan plan also calls for increased oil and gas drilling off the coasts of Virginia, Florida, and North Carolina, threating the coastal industries that provide economic benefits and support jobs.

Renewable electricity has nearly doubled under the Obama administration, and the clean energy economy grew by 8.3 percent from 2003 to 2010, almost double of what the overall economy grew during those years. But Gov. Romney’s plan threatens the 77,000 green jobs in North Carolina and risks the creation of thousands more in the years to come.

Drastic cuts to federal spending would shrink North Carolina’s middle class

Gov. Romney and Rep. Ryan promise enormous cuts in overall federal spending, totaling more than $4 trillion over 10 years. At the same time, they have promised enormous amounts of new spending for the Pentagon—more money, in fact, than the Pentagon itself says it needs. They’ve also offered assurances that there will be no cuts to Medicare or Social Security for those over the age of 55, a promise at odds with their vow to repeal the Affordable Care Act, which improved Medicare benefits and lowered costs for current seniors. But taken together, these promises necessarily mean that the entire bulk of the Romney-Ryan spending cuts will necessarily fall on the remaining 40 percent of the budget. And unfortunately for states, nearly all of their federal funding can be found in that remaining 40 percent.

In 2010 North Carolina received nearly $15.1 billion in federal aid. This money helped support North Carolina’s schools, law enforcement efforts, highway repairs, and job-training programs. It helped put food on North Carolina families’ tables and it helped provide health insurance to nearly one in every five North Carolinians, including more than 1.2 million of North Carolina’s children. But that funding would be dramatically curtailed under the proposed budget policies of Gov. Romney and Rep. Ryan. In fact, their budget plan would cost North Carolina approximately $743 million in federal funding in 2013 alone, and the costs to North Carolina would grow to almost $6 billion by 2016. (see Figure 1 on following page) The simple math dictates that for the Romney-Ryan plan to achieve their spending goal, they will need to cut nearly all federal grants to the states by a staggering 40 percent by 2016. And that is in addition to the nearly 30 percent cut to Medicaid that would result from their plan to transform Medicaid into a block grant. Altogether, under the Romney-Ryan plan, North Carolina stands to lose more than $71.4 billion in federal funding from 2013 through 2022, an average of more than $7.1 billion a year. (see methodology on page 12)

Then there are the other federal programs that help low-income and middle-class families with their children’s education. The Romney-Ryan education plan, dubbed “A Chance for Every Child,” would eliminate federal requirements that low-performing schools take action to improve the education of their students, end the federal requirement that teachers obtain certification to teach, and privatize public education by turning federal funds for low-income and special-needs students into vouchers. Gov. Romney and Rep. Ryan would also sharply defund the Pell Grant for aspiring college students from poor families.

In North Carolina the consequences would be devastating. Under the Romney-Ryan plan:

• The Head Start program for pre-Kindergarten children would be crippled. Under their plan, in 2013 alone Head Start in North Carolina would lose $32 million, resulting in 4,445 slots for children eliminated and almost 1,800 job losses. In 2014 those numbers jump to $73 million in cuts, resulting in 8,903 slots for children eliminated and more than 4,000 jobs lost.
• Special education funding would be slashed. Under their plan $58 million in cuts for special-education grants would result in the costs for 31,796 students’ special instruction being shifted to the states, jeopardizing their education and costing around 1,000 jobs to be lost. But in 2014, these cuts become even more drastic with the cuts increasing to $133 million, resulting in 72,807 children at risk of no longer having their classes and more than 2,000 jobs being cut.
• Big cuts for colleges and aspiring students. The Romney-Ryan budget would so severely restrict Pell Grant eligibility that more than 1 million low- and middle-income students would no longer be able to count on them to help pay for college.Cuts to these grants would be devastating to the 253,788 North Carolina students who depend upon them to further their education. The average Pell Grant to North Carolina students under the Romney-Ryan plan would be cut by about $830 a year.

Gov. Romney gave his answer to student’s needing money earlier this year during an appearance at Otterbein University, when he advised cash-strapped students to “borrow money if you have to from your parents.” He followed up this recommendation by recounting a story about a friend who borrowed $20,000 from his parents, not an opportunity most young people have. If not realistic, this advice is not entirely surprising, given that Gov. Romney paid for college by selling stock options given to him by his CEO father.

Seniors in North Carolina would lose health care benefits and pay more

Gov. Romney and Rep. Ryan plan to convert our nation’s Medicare program into a voucher system for people who are under 55 years of age. It is that simple. Their candidacy has become infamous for its startling determination to lie about President Obama’s plans for Medicare and the true nature of their own plan for the vital program. Under their plan, seniors beginning in 2023 would receive vouchers to purchase health insurance from either private insurance companies or from traditional Medicare. If premiums for traditional Medicare or the private plan they choose cost more than the voucher amount, then seniors would have to pay the difference themselves.

Gov. Romney and Rep. Ryan claim that no one over 55 will be affected by their plan to turn Medicare into a voucher. But that’s simply not true. The reason: Seniors across our country are already benefiting from changes to Medicare because of Obamacare.

Nearly 751,000 of North Carolina seniors who rely on their Medicare benefits receive one or more preventive services—such as cancer screenings, diabetes testing, and bone density scans—free of charge through their Medicare plan.This is saving North Carolina seniors money each year and also providing them with the care needed to protect their health.

What’s more, Gov. Romney and Rep. Ryan would open up the prescription drug donut hole that Obamacare is closing. Since the law was enacted, North Carolina seniors have saved $131 million on prescription drug costs because Obamacare is closing the loophole. In 2012 alone, almost 55,000 North Carolina seniors and people with disabilities saved $33.3 million. While they each have saved an average of $612 this year, Gov. Romney and Rep. Ryan would force them to once again pay for this out of pocket.

Because of the increased drug costs and higher Medicare premiums, the Romney-Ryan voucher plan would raise health care costs for current seniors by $11,000 for the average person who is 65 years old today. And it’s even worse for the future seniors. Because of cost shifting and increases in system-wide health care costs, Medicare costs for future seniors who become eligible for Medicare after 2022 will increase dramatically under the Romney-Ryan plan. Specifically, upon retirement:

• Today’s 54 year old will have to pay increased Medicare costs of $59,450
• Today’s 49 year old will have to pay $124,626 more
• Today’s 39 year old will have to pay $216,631 more
• Today’s 29 year old will have to save $331,170 more

These estimates are conservative because we examined the least radical of the various Romney-Ryan proposals to calculate our estimates. Had we instead used the budget plan authored by Rep. Ryan for the House of Representatives in 2011, the nonpartisan Congressional Budget Office estimates it would result in increased costs that are much greater, forcing current seniors to pay $6,400 more per year for their health care costs.

Women in North Carolina would pay more for health care but receive less bang for their buck

Make no mistake, whether we’re talking about women’s health or reproductive rights, Gov. Romney and Rep. Ryan want to take women backward. Women’s health has been under constant siege since Republicans overtook the House of Representatives and some additional state governments in the 2010 midterm elections.

North Carolina Republicans have been eager to take on women’s health and devoted significant energy over the past two years to attacking Planned Parenthood. In 2011 the Republican-controlled legislature attempted to block state funds for contraception and teen pregnancy prevention from going to the group, but that was subsequently blocked by a federal judge. This year the legislature passed a bill defunding all private providers of family planning services, which was vetoed by Gov. Beverly Purdue (D). The legislature, however, subsequently overrode her veto. The Obama administration has stepped in with emergency Title X family planning grants for Planned Parenthood in North Carolina and other states where funding has been cut.

Indeed, the Republican record includes the all-male U.S. congressional panel debating insurance coverage for contraception, 33 attempts to repeal the health reform law and all of its benefits for women, vaginal probes in Virginia and elsewhere, and efforts to defund Planned Parenthood clinics around the country. Gov. Romney and Rep. Ryan even endorse the radical “personhood” measures that would outlaw abortion in all circumstances and could potentially ban common forms of birth control and in-vitro fertilization.

Yet Gov. Romney and Rep. Ryan want to launch a more broadly insidious campaign against women’s health. If elected president, Gov. Romney promises to repeal the Affordable Care Act “on day one” of his presidency. Why is Obamacare so important to women’s health? Due largely to the high cost of health insurance coverage—especially for women without access to employer-based coverage—19 million American women between the ages of 18 and 64 were uninsured in 2011, including more than 651,000 women in North Carolina.

Even if insured, women tend to have higher out-of-pocket costs than men. Women of reproductive age spend 68 percent more than men on health care expenses. And more than half of American women report delaying needed medical care because of cost, while one-third of women report giving up basic necessities such as food, heat, or rent to pay for health care expenses. In 2014 the health care law will prohibit insurance companies from their practice of routinely denying women coverage for gender-related pre-existing conditions such as breast cancer, a Cesarean section, domestic violence, or sexual assault. And Obamacare has already prohibited insurance companies from continuing to deny coverage to the 163,000 North Carolina children who have a pre-existing condition.

Obamacare also makes health care more affordable by guaranteeing no-cost coverage for recommended preventive services such as mammograms, Pap smears, well-baby care, contraception, gestational diabetes screening, lactation supports, and much more. Approximately 47 million women will have access to women’s preventive services without cost-sharing under the Affordable Care Act, including nearly 1.3 million women in North Carolina.

Women without employer-based insurance coverage have it particularly hard in the so-called individual health insurance market, which discriminates against women in numerous ways and which Gov. Romney and Rep. Ryan want to maintain. Women are often charged much more for their health insurance coverage solely because of their gender, a practice known as gender rating. In fact, women currently pay $1 billion more than men each year in health insurance premiums in the individual market for the same benefit. Because North Carolina law does not prohibit or limit insurers from charging women more, if Gov. Romney and Rep. Ryan succeed in repealing the health care law, women would once again face higher costs simply because of their gender.

Young adults in North Carolina would lose access to their families’ health insurance

The Millennial generation of Americans born in the late 1970s and early 1980s also face staggering costs and loss of care from the Romney-Ryan plan for health care. Gov. Romney’s promise to dismantle Obamacare would result in 95,000 young adults in North Carolina losing the access they have today to their families’ health insurance due to the Affordable Care Act. And because of the Romney-Ryan plan to turn Medicare into a voucher program, today’s average 29 year old will have to save $331,200 more to afford their health care upon retirement under the Romney-Ryan plan.

Conclusion

The 2012 presidential election offers two contrasting visions of how our country should work. President Obama and Vice President Biden seek to restore the shared prosperity that once defined the growth of our nation’s middle class while Gov. Romney and Rep. Ryan want to return to the trickle-down economic policies of the Bush era, which led inexorably to the Great Recession.

The contrast is clear. It’s no exaggeration to say the future growth and prosperity of North Carolina’s middle class is at stake. The decision made in this election will determine the strength of the state’s middle class and the course our country takes not just over the next two or four years but for decades to come.

President Obama and Vice President Biden are clear in their plans to restore shared prosperity. Gov. Romney and Rep. Ryan are much less open about their policy intentions, yet as this brief demonstrates, what they have unveiled enables us to examine the consequences in telling detail. In North Carolina and across our nation, low-income and middle-class Americans would sacrifice for the greater benefit of the wealthiest under the Romney-Ryan plan for the economy, taxes, and health care. In contrast, the Obama-Biden plan asks for shared sacrifice and shared prosperity that is necessary to grow our middle class and preserve our global economic competitiveness well into the 21st century.

Methodology

In order to estimate the effect of the spending plans of Republican presidential and vice presidential contenders Gov. Mitt Romney (R-MA) and Rep. Paul Ryan (R-WI) on federal funding for states, we begin by estimating the percentage cut in overall spending that would be required given their stated spending proposals. For federal spending they propose to:

• Cap all federal spending at 20 percent of gross domestic product
• Increase defense spending to 4 percent of gross domestic product
• Make no cuts to Medicare or Social Security in the next 10 years
• Repeal the Affordable Care Act, including the Medicare savings, which would increase Medicare spending by more than $700 billion
• Transform Medicaid into block grants to the states

In order to comply with the Romney-Ryan spending cap after accounting for the spending effects of the other policy proposals, the former Massachusetts governor and House Budget Committee chairman would need to cut all other federal spending—that is spending aside from Social Security, Medicare, Medicaid, defense, and net interest—by about 11 percent in 2013, growing to 63 percent by 2022, for an annual average of 39 percent over the next 10 years. These calculations rely on the following assumptions:

• The Romney-Ryan plan would reduce federal spending to fully comply with their proposed spending cap by the end of 2016.
• From 2013 through 2015 their plan would reduce overall federal spending to levels consistent with the House Republican budget plan, authored by Rep. Ryan.
• The Romney-Ryan plan to turn Medicaid into a block grant will be roughly consistent with Rep. Paul Ryan’s plan as detailed in his most recent budget plan.
• The baseline, against which the percentage cuts are calculated, includes a permanent fix to the Medicare Sustainable Growth Rate formula, a repeal of the “sequester” automatic spending cuts, and the drawdown of U.S. military forces in overseas combat operations.

In order to estimate how these cuts would specifically impact states, we started with U.S. Census Bureau data on federal aid to states in fiscal year 2010—the most recent year available.We then extrapolated fiscal year 2013 through 2022 funding by using the most recent Congressional Budget Office baseline estimates. For mandatory grants we used CBO’s spending growth projections specific to those particular programs. For discretionary grants we used the general growth projections for nondefense discretionary spending.

Since nearly all federal grants to states, with the notable exception of Medicaid, fall into the “other federal spending” category, we applied the annual percentage cut required to comply with the Romney-Ryan plan’s proposed cap to the baseline projections of all non-Medicaid grants. But since their plan has a separate policy for Medicaid, we did not apply the “across-the-board” percentage cut to that program. Instead, for Medicaid, we applied the annual percentage cut that would occur under the “block grant” proposal from Rep. Ryan that is broadly similar to Gov. Romney’s outlined proposal. This cut also includes the effect of repealing the Affordable Care Act.

SOURCE: AP/Conrad Schmidt

Republican vice presidential candidate Rep. Paul Ryan (R-WI), accompanied by Iowa Gov. Terry Branstad, left, speaks at the Iowa State Fair in Des Moines. The real cost of a Romney-Ryan presidency for Iowans would be steep, especially for seniors, students, and the middle class, among others.

View infographic: “Mitt Romney’s Dangerous Agenda for Iowa Women and their Families.”

Endnotes and citations are available in the PDF version of this issue brief.

Behind dramatically different economic visions and a deluge of attack ads, this election comes down to numbers. Many Iowans—and many families across the United States—are asking what this will mean at the kitchen table. What will be the cost of a second term of President Barack Obama and Vice President Joe Biden or a first term led by former Massachusetts Gov. Mitt Romney and his running mate, Rep. Paul Ryan (R-WI)? The answer is that, in concrete and quantifiable ways, a Romney-Ryan presidency would mean higher taxes for the middle class, out-of-pocket health expenses for current seniors, fewer college loans and fewer health care options for young people, and the re-introduction of corporate outsourcing tax loopholes that have sent so many jobs overseas.

The Center for American Progress Action Fund examined the economic and tax agenda of Gov. Romney and Rep. Ryan, taking a close look at how their policies would affect the way Iowans live and work. The price tag includes:

• Middle-class Iowans would pay more in taxes while millionaires pay less. Millionaires in the state would receive an additional $87,000 in tax breaks under the tax plans of Gov. Romney and Rep. Ryan while middle-class families would pay up to $1,900 more in health care taxes and $1,066 more in taxes on their mortgages.
• Jobs would decline across Iowa. Gov. Romney and Rep. Ryan plan to provide extra tax incentives for corporations to outsource jobs and are pushing policy proposals to cripple the clean energy industry, jeopardizing 40,000 jobs across the state.
• Drastic cuts to federal spending would shrink Iowa’s middle class. The state stands to lose more than $23.6 billion in federal funding from 2013 through 2022, an average of more than $2.3 billion a year, from cuts to schools, law enforcement, highway repairs, job-training programs and more. These cuts would fall predominantly on middle-class and low-income families, especially cuts to education programs that would result in nearly $73 million in reduced federal support for education and job training in the state in 2013 and $169 million in 2014 alone.
• Seniors in Iowa would lose health care benefits and pay more. Gov. Romney and Rep. Ryan would force seniors in the state to pay at least $585 more for their prescrip­tion drugs each year. At the same time, the Romney-Ryan plan to turn Medicare into a voucher would cost current seniors at least $11,000 more out of pocket.
• Women in Iowa would pay more for health care but receive less bang for their buck. Gov. Romney and Rep. Ryan would once again allow insurance companies to charge women more than men while taking away preventive care from 520,000 women in the state.
•  Young adults in Iowa would lose access to their families’ health insurance. Gov. Romney and Rep. Ryan promise to dismantle Obamacare, which would directly result in 20,000 young adults in Iowa losing the insurance they have today due to the Affordable Care Act.

The Romney-Ryan plan asks the vast majority of Americans to pay more, and then spends this revenue not on balancing the budget but rather on more tax breaks for the richest Americans. Gov. Romney’s top direct donor would receive more than $2 billion in direct tax benefits from under the Romney-Ryan plan, while a typical police officer in Des Moines earns $50,890 a year and would see their taxes increase by $1,550. These lopsided priorities are not a coincidence or a cruel joke. They are the logical extension of a trickle-down economic policy that failed under President George W. Bush but would be revived by Gov. Romney and Rep. Ryan.

President Obama and Vice President Biden, in contrast, believe that economic growth comes from a strong middle class, rather than being passed down from the wealthiest. They have passed and seek greater investments in education, job-training, infrastructure development, and scientific research and development to boost our nation’s long-term economic competiveness, coupled with targeted cuts in government spending and the end of the Bush-era tax cuts for the wealthiest Americans to bring the federal budget deficit under control.

The Republican contenders for the White House have tried to avoid details, but have nonetheless gone on the record with proposals that have enormous consequences for the economy, taxes, women’s health, health care, and energy security. The Center for American Progress Action Fund believes facts should matter in elections because they will certainly matter to families trying to live the American Dream. This report outlines the real cost of Romney-Ryan policies to Iowans.

It is tempting for people across Iowa to start tuning out the election, defined too often by gaffes and thirty-second sound bites. But behind the politics are deep policy differ­ences with profound consequences for the middle class.

Middle-class Iowans pay more in taxes while millionaires pay less

The linchpin of the economic strategy championed by Gov. Romney and Rep. Ryan is to further enrich the wealthiest by doubling down on conservative, top-down tax policies. Those tax policies—even more top heavy than those implemented by President George

W. Bush, which led to the weakest job creation in the post-war era despite giving the richest Americans massive tax cuts—would further fuel the single biggest factor driving up our national debt. Gov. Romney proposes approximately $5 trillion in new tax cuts on top of the cost of extending all of the Bush-era tax cuts.

But instead of learning the lessons from past failed policies, Gov. Romney’s plan is to provide the wealthiest individuals and corporations with additional tax breaks, while asking the middle class, seniors, and students to pay even more. Here’s how the Romney-Ryan tax plan would affect Iowans.

Raising taxes on middle-class Iowa families

The tax plan of the two Republican candidates gives massive tax cuts to the richest Americans and corporations while purporting to collect the same amount of revenue as our current tax policies. The only way his plan adds up is by raising taxes on middle-class families in Iowa and throughout the country. The nonpartisan Tax Policy Center found that Gov. Romney’s tax plan would require raising taxes on middle-class families with children who have incomes under $200,000 by an average of $2,000 per family. It would raise the average tax bill for all middle-class taxpayers by $500.

Their tax plan would raise taxes on low-income and middle-class families by forcing deep cuts in tax benefits such as the child tax credit, the mortgage interest deduction, the exemption for employer-provided health benefits, and the deduction for state and local taxes. Though Gov. Romney and Rep. Ryan repeatedly refuse to say which specific tax breaks they would eliminate or reduce, the Tax Policy Center calculates that these major tax benefits for middle-class families would have to be reduced by 58 percent to pay for his tax cut for the rich. That 58 percent cut does not even account for the fact that middle-class taxpayers would be forced to pay for the $1.1 trillion corporate tax cut also championed by the Republican ticket.

Here is how this hidden part of the Romney-Ryan tax plan would affect low-income and middle-class families in Iowa:

• 1.7 million. The number of families in the state that rely on health insurance from their employer, which is currently not taxed.
• $1,150-1,900. The amount those middle-class families would pay in higher taxes if the exemption for employer health insurance is reduced by 58 percent.

• 323,000. The number of middle-class families in the state that file for the mortgage interest deduction on their federal taxes.
• $1,066. The average loss in mortgage interest deduction for middle-class families in the state if the deduction is cut by 58 percent.

• 426,000. The number of middle-class families in the state that deduct state and local taxes from their federal income taxes.
• $670. The amount on average that middle class families in the state will pay in higher taxes if the deduction for state and local taxes is cut by 58 percent.

• 254,000. The number of middle-class families in the state that benefit from the child tax credit.
• $580. The amount that families in the state will pay in higher taxes per child if the child tax credit is reduced by 58 percent.

• 80,000. The number of low-income and middle-class families in the state that claim the child care tax credit (in addition to the child tax credit detailed above).
• $318. The amount that families in the state will pay in higher taxes per child if the child care tax credit (in addition to the child tax credit detailed above) is reduced by 58 percent.

• 369,000. The number of low-income working families in the state that qualify for the earned income tax credit or the refundable portion of the child tax credit.
• $724. The tax increase for more than 86,000 of those families (with a total of 191,000 children) would pay on average if the improvements to those tax credits passed under President Obama are rolled back, as the Romney-Ryan plan proposes.

• 78,000. The number of middle-class Iowa families and students paying for college educations that use President Obama’s American Opportunity Tax Credit.
• $2,000. The average benefit these families and students receive from the American Opportunity Tax Credit. The Romney-Ryan tax plan would eliminate this credit, leav­ing families in the state with no credit or a less valuable tuition credit.

All these tax hikes on low-income and middle-class families would come courtesy of the Romney-Ryan tax plan’s overarching emphasis on providing even more tax breaks to the top income earners in our country. Their plan would force middle-class families to pay more in taxes than they do today so that the richest among us pay less.

The bottom line for Iowans: The 1,347 millionaires in the state would see an additional tax cut of at least $87,000. The total costs for these tax cuts for all the citizens of the state would be at least $117 million.

Jobs would decline across Iowa

Gov. Romney famously argued that we should have “let Detroit go bankrupt,” never mind the consequences for workers. The Romney-Ryan plan takes the same approach to job creation, which would be devastating to our economy and the lives of tens of millions of Americans. The Romney-Ryan plan for job creation is so out of touch with what’s best for our country because it relies on the same top-down economics that cre­ated the worst job growth in decades under President George W. Bush.

Gov. Romney and Rep. Ryan claim they will create 12 million new jobs by the end of 2016, the end of their presumptive first term. In fact, their proposal would kill 360,000 jobs next year alone. Most telling, their plan includes even greater tax incentives for outsourcing that would actively undermine U.S. employment, leading to 800,000 more jobs being created in foreign countries.

Here’s what it would mean for Iowa.

Letting the auto industry go bankrupt

The auto industry is vital to the health of our economy. President Obama’s decision to save the U.S. auto industry prevented the immediate loss of more than 1 million American jobs across the country.

And now the auto industry is roaring back. General Motors Co. is once again the largest automaker in the world. The industry in total has added over 236,000 jobs since June 2009. In addition, another 6,300 jobs are projected to be created in Iowa specifically because of new fuel economy standards finalized last month. The Romney-Ryan campaign denounced the standards, which will save the average American family $8,000 once fully implemented, as “extreme.”

How clean energy helped power new jobs in the state

Gov. Romney and Rep. Ryan present a clear vision for America’s energy future. They want more lucrative tax breaks for Big Oil companies and their allies while slashing investments in clean energy technologies that create U.S. jobs and keep the United States competitive in the global marketplace.

Instead of investing in the growing clean energy economy and acknowledging the benefits of clean energy to Iowa’s economy and health of its residents, the Romney-Ryan clean energy plan is to attack the industry and undermine its growth, calling green jobs “illusory,” and opposing key wind tax credits that support thousands of jobs in the Hawkeye State. The state is the second-largest producer of wind energy in the United States, and first in overall wind energy jobs, which keep thousands of Iowans employed. Since 1983, when Iowa passed a renewable energy standard, some $5 bil­lion in wind investment has flooded the state, according to industry estimates.

There are nearly 40,000 green jobs in Iowa, according to the U.S. Bureau of Labor Statistics, and nationwide the sector employs more than 3 million Americans. More than 6,000 of those Iowa jobs are wind jobs. Iowa is the poster child for the benefits of the wind production tax credit. The state has been able to attract more wind energy manufacturers than any other state, and direct manufacturing of wind turbines has resulted in more than 3,200 jobs. There are more than 215 wind-related businesses in the state and Iowa is using wind to create enough power to supply more than 1 million homes with electricity. In 2011 wind energy provided nearly 20 percent of the state’s total electricity generation, and the state’s wind resources could provide 44 times the state’s current electricity needs. Moreover, wind power currently installed in Iowa will avoid 7.3 million metric tons of carbon dioxide a year, according to the American Wind Energy Association.

The wind production tax credit has helped leverage up to $20 billion in private invest­ments annually. And with this key tax credit in place, the wind industry has dropped costs by 90 percent over the last few decades. The wind industry supports 75,000 jobs across the United States, with 30,000 in manufacturing. Yet Gov. Romney’s opposition to extending this vital tax credit would hurt the wind industry and cost 37,000 American jobs.

Renewable electricity has nearly doubled under the Obama administration, and the clean energy economy grew by 8.3 percent from 2003–2010—almost double the overall economy’s growth during those years—but Gov. Romney’s plan threatens the economic benefits and tens of thousands of clean energy jobs in Iowa and risks the creation of thousands more in the years to come.

Drastic cuts to federal spending would shrink Iowa’s middle class

Gov. Romney and Rep. Ryan promise enormous cuts in overall federal spending, totaling more than $4 trillion over 10 years. At the same time, they have promised enormous amounts of new spending for the Pentagon—more money, in fact, than the Pentagon itself says it needs. They’ve also offered assurances that there will be no cuts to Medicare or Social Security for those over the age of 55, a promise at odds with their vow to repeal the Affordable Care Act, which improved Medicare benefits and lowered costs for current seniors. But taken together, these promises necessarily mean that the entire bulk of the Romney-Ryan spending cuts will necessarily fall on the remaining 40 percent of the budget. And unfortunately for states, nearly all of their federal funding can be found in that remaining 40 percent.

In 2010 Iowa received nearly $5.2 billion in federal aid. This money helped support Iowa’s schools, law enforcement efforts, highway repairs, and job-training programs. It helped put food on Iowa families’ tables and it helped provide health insurance to one in every six Iowans, including more than 314,000 of Iowa’s children. But that funding would be dramatically curtailed under the proposed budget policies of Gov. Romney and Rep. Ryan. In fact, their budget plan would cost Iowa approximately $302 million in federal funding in 2013 alone, and the costs to Iowa would grow to more than $2 billion by 2016. (see Figure 1)

The simple math dictates that for the Romney-Ryan plan to achieve their spending goal, they will need to cut nearly all federal grants to the states by a stag­gering 40 percent by 2016. And that is in addition to the nearly 30 percent cut to Medicaid that would result from their plan to transform Medicaid into a block grant. Altogether, under the Romney-Ryan plan, Iowa stands to lose more than $23 billion in federal funding from 2013 through 2022, an average of more than $2.37 billion a year. (see methodology)

Then there are the other federal programs that help low-income and middle-class families with their children’s education. The Romney-Ryan education plan, dubbed “A Chance for Every Child,” would eliminate federal requirements that low-performing schools take action to improve the education of their students, end the federal requirement that teachers obtain certification to teach, and privatize public education by turning federal funds for low-income and special-needs students into vouchers. Gov. Romney and Rep. Ryan would also sharply defund the Pell Grant for aspiring college students from poor families.

In Iowa the consequences would be devastating. Under the Romney-Ryan plan:

• The Head Start program for pre-Kindergarten children would be crippled. Under their plan, in 2013 alone Head Start in Iowa would lose $9 million, resulting in 1,411 slots for children eliminated and almost 600 job losses. In 2014 those numbers jump to $21 million in cuts, resulting in 2,883 slots for children eliminated and nearly 1,400 jobs lost.
• Special education funding would be slashed. Under their plan $24 million in cuts for special-education grants would result in the costs for 12,960 students’ special instruction being shifted to the states, jeopardizing their education and costing around 350 jobs to be lost. But in 2014, these cuts become even more drastic with the cuts increasing to $56 million, resulting in 30,358 children at risk of no longer having their classes and more than 800 jobs being cut.
• Big cuts for colleges and aspiring students. The Romney-Ryan budget would so severely restrict Pell Grant eligibility that more than 1 million low- and middle-income students would no longer be able to count on them to help pay for college. Cuts to these grants would be devastating to the 221,262 Iowa students who depend upon them to further their education. The average Pell Grant to Iowa students under the Romney-Ryan plan would be cut by about $830 a year.

Gov. Romney gave his answer to student’s needing money earlier this year during an appear­ance at Otterbein University, when he advised cash-strapped students to “borrow money if you have to from your parents.” He followed up this recommendation by recounting a story about a friend who borrowed $20,000 from his parents, not an opportunity most young people have. If not realistic, this advice is not entirely surprising, given that Gov. Romney paid for college by selling stock options given to him by his CEO father.

Seniors in Iowa would lose health care benefits and pay more

Gov. Romney and Rep. Ryan plan to convert our nation’s Medicare program into a voucher system for people who are under 55 years of age. It is that simple. Their candi­dacy has become infamous for its startling determination to lie about President Obama’s plans for Medicare and the true nature of their own plan for the vital program. Under their plan, seniors beginning in 2023 would receive vouchers to purchase health insur­ance from either private insurance companies or from traditional Medicare. If premiums for traditional Medicare or the private plan they choose cost more than the voucher amount, then seniors would have to pay the difference themselves.

Gov. Romney and Rep. Ryan claim that no one over 55 will be affected by their plan to turn Medicare into a voucher. But that’s simply not true. The reason: Seniors across our country are already benefiting from changes to Medicare because of Obamacare.

More than 231,000 of Iowa seniors who rely on their Medicare benefits receive one or more preventive services—such as cancer screenings, diabetes testing, and bone density scans—free of charge through their Medicare plan.This is saving Iowa seniors money each year and also providing them with the care needed to protect their health.

What’s more, Gov. Romney and Rep. Ryan would open up the prescription drug donut hole that Obamacare is closing. Since the law was enacted, Iowa seniors have saved $50.5 million on prescription drug costs because Obamacare is closing the loophole. In 2012 alone, more than 19,000 Iowa seniors and people with disabilities saved $11.4 million. While they each have saved an average of $585 this year, Gov. Romney and Rep. Ryan would force them to once again pay for this out of pocket.

Because of the increased drug costs and higher Medicare premiums, the Romney-Ryan voucher plan would raise health care costs for current seniors by $11,000 for the average person who is 65 years old today. And it’s even worse for the future seniors. Because of cost shifting and increases in system-wide health care costs, Medicare costs for future seniors who become eligible for Medicare after 2022 will increase dramatically under the Romney-Ryan plan. Specifically, upon retirement:

• Today’s 54-year-old will have to pay increased Medicare costs of $59,450
• Today’s 49-year-old will have to pay $124,626 more
• Today’s 39-year-old will have to pay $216,631 more
• Today’s 29-year-old will have to pay $331,170 more

These estimates are conservative because we examined the least radical of the various Romney-Ryan proposals to calculate our estimates. Had we instead used the budget plan authored by Rep. Ryan for the House of Representatives in 2011, the nonpartisan Congressional Budget Office estimates it would result in increased costs that are much greater, forcing current seniors to pay $6,400 more per year for their health care costs.

Women in Iowa would pay more for health care but receive less bang for their buck

Make no mistake, whether we’re talking about women’s health or reproductive rights, Gov. Romney and Rep. Ryan want to take women backward. Women’s health has been under constant siege since Republicans overtook the House of Representatives and some additional state governments in the 2010 midterm elections.

Iowa Republicans have been eager to take on women’s health. Earlier this year the state legislature considered a Republican bill to defund Planned Parenthood. Republicans in the legislature also considered a radical “personhood” measure that would outlaw abortion in all circumstances and could potentially ban common forms of birth control and in-vitro fertilization. Another bill pushed last year by Iowa Republicans could’ve legalized the murder of abortion providers.

Indeed, the Republican record includes the all-male U.S. congressional panel debating insurance coverage for contraception, 33 attempts to repeal the health reform law and all of its benefits for women, vaginal probes in Virginia and elsewhere, and efforts to defund Planned Parenthood clinics around the country. Gov. Romney and Rep. Ryan even endorse the radical “personhood” measures that would outlaw abortion in all circum­stances and could potentially ban common forms of birth control and in-vitro fertilization.

Yet Gov. Romney and Rep. Ryan want to launch a more broadly insidious campaign against women’s health. If elected president, Gov. Romney promises to repeal the Affordable Care Act “on day one” of his presidency. Why is Obamacare so important to women’s health? Due largely to the high cost of health insurance coverage—especially for women without access to employer-based coverage—19 million American women between the ages of 18 and 64 were uninsured in 2011, including more than 125,000 women in Iowa.

Even if insured, women tend to have higher out-of-pocket costs than men. Women of reproductive age spend 68 percent more than men on health care expenses. And more than half of American women report delaying needed medical care because of cost, while one-third of women report giving up basic necessities such as food, heat, or rent to pay for health care expenses. In 2014 the health care law will prohibit insurance companies from their practice of routinely denying women coverage for gender-related pre-existing condi­tions such as breast cancer, a Cesarean section, domestic violence, or sexual assault. And Obamacare has already prohibited insurance companies from continuing to deny coverage to the 58,000 Iowa children who have a pre-existing condition.

Obamacare also makes health care more affordable by guaranteeing no-cost coverage for rec­ommended preventive services such as mammograms, Pap smears, well-baby care, contra­ception, gestational diabetes screening, lactation supports, and much more. Approximately 47 million women will have access to women’s preventive services without cost-sharing under the Affordable Care Act, including nearly 520,000 women in Iowa.

Women without employer-based insurance coverage have it particularly hard in the so-called individual health insurance market, which discriminates against women in numer­ous ways and which Gov. Romney and Rep. Ryan want to maintain. Women are often charged much more for their health insurance coverage solely because of their gender, a practice known as gender rating. In fact, women currently pay $1 billion more than men each year in health insurance premiums in the individual market for the same benefit. Because Iowa law does not prohibit or limit insurers from charging women more, if Gov. Romney and Rep. Ryan succeed in repealing the health care law, women would once again face higher costs simply because of their gender.

Young adults in Iowa would lose access to their families’ health insurance

The Millennial generation of Americans born in the late 1970s and early 1980s also face staggering costs and loss of care from the Romney-Ryan plan for health care. Gov. Romney’s promise to dismantle Obamacare would result in 20,000 young adults in Iowa losing the access they have today to their families’ health insurance due to the Affordable Care Act. And because of the Romney-Ryan plan to turn Medicare into a voucher pro­gram, today’s average 29 year old will have to save $331,200 more to afford their health care upon retirement under the Romney-Ryan plan.

Conclusion

The 2012 presidential election offers two contrasting visions of how our country should work. President Obama and Vice President Biden seek to restore the shared prosperity that once defined the growth of our nation’s middle class while Gov. Romney and Rep. Ryan want to return to the trickle-down economic policies of the Bush era, which led inexorably to the Great Recession.

The contrast is clear. It’s no exaggeration to say the future growth and prosperity of Iowa’s middle class is at stake. The decision made in this election will determine the strength of the state’s middle class and the course our country takes not just over the next two or four years but for decades to come.

President Obama and Vice President Biden are clear in their plans to restore shared prosperity. Gov. Romney and Rep. Ryan are much less open about their policy intentions, yet as this brief demonstrates, what they have unveiled enables us to examine the con­sequences in telling detail. In Iowa and across our nation, low-income and middle-class Americans would sacrifice for the greater benefit of the wealthiest under the Romney-Ryan plan for the economy, taxes, and health care. In contrast, the Obama-Biden plan asks for shared sacrifice and shared prosperity that is necessary to grow our middle class and preserve our global economic competitiveness well into the 21st century.

Methodology

In order to estimate the effect of the spending plans of Republican presidential and vice presidential contenders Gov. Mitt Romney (R-MA) and Rep. Paul Ryan (R-WI) on federal funding for states, we begin by estimating the percentage cut in overall spending that would be required given their stated spending proposals. For federal spending they propose to:

• Cap all federal spending at 20 percent of gross domestic product
• Increase defense spending to 4 percent of gross domestic product
• Make no cuts to Medicare or Social Security in the next 10 years
• Repeal the Affordable Care Act, including the Medicare savings, which would increase Medicare spending by more than $700 billion
• Transform Medicaid into block grants to the states
• In order to comply with the Romney-Ryan spending cap after accounting for the spend­ing effects of the other policy proposals, the former Massachusetts governor and House Budget Committee chairman would need to cut all other federal spending—that is spending aside from Social Security, Medicare, Medicaid, defense, and net interest—by about 11 percent in 2013, growing to 63 percent by 2022, for an annual average of 39 percent over the next 10 years. These calculations rely on the following assumptions:
• The Romney-Ryan plan would reduce federal spending to fully comply with their proposed spending cap by the end of 2016.
• From 2013 through 2015 their plan would reduce overall federal spending to levels consistent with the House Republican budget plan, authored by Rep. Ryan.
• The Romney-Ryan plan to turn Medicaid into a block grant will be roughly consistent with Rep. Paul Ryan’s plan as detailed in his most recent budget plan.
• The baseline, against which the percentage cuts are calculated, includes a permanent fix to the Medicare Sustainable Growth Rate formula, a repeal of the “sequester” automatic spending cuts, and the drawdown of U.S. military forces in overseas combat operations.

In order to estimate how these cuts would specifically impact states, we started with U.S. Census Bureau data on federal aid to states in fiscal year 2010—the most recent year avail­able. We then extrapolated fiscal year 2013 through 2022 funding by using the most recent Congressional Budget Office baseline estimates. For mandatory grants we used CBO’s spending growth projections specific to those particular programs. For discretionary grants we used the general growth projections for nondefense discretionary spending.

Since nearly all federal grants to states, with the notable exception of Medicaid, fall into the “other federal spending” category, we applied the annual percentage cut required to comply with the Romney-Ryan plan’s proposed cap to the baseline projections of all non-Medicaid grants. But since their plan has a separate policy for Medicaid, we did not apply the “across-the-board” percentage cut to that program. Instead, for Medicaid, we applied the annual percentage cut that would occur under the “block grant” proposal from Rep. Ryan that is broadly similar to Gov. Romney’s outlined proposal. This cut also includes the effect of repealing the Affordable Care Act.

SOURCE: AP/Mary Altaffer

Republican presidential candidate Mitt Romney, left, and his vice-presidential running mate Rep. Paul Ryan (R-WI) greet supporters as they arrive at a campaign event, Saturday, September 1, 2012, in Jacksonville, Florida. Romney's wife Ann is at center.

View infographic: “The Real Cost of the Romney-Ryan Plan to Floridians.”

View infographic: “Mitt Romney’s Dangerous Agenda for Florida Women and their Families.”

Behind dramatically different economic visions and a deluge of attack ads, this election comes down to numbers. Many Floridians—and many families across the United States—are asking what this will mean at the kitchen table. What will be the cost of a second term of President Barack Obama and Vice President Joe Biden or a first term led by former Massachusetts Gov. Mitt Romney and his running mate, Rep. Paul Ryan (R-WI)? The answer is that, in concrete and quantifiable ways, a Romney-Ryan presidency would mean higher taxes for the middle class, out-of-pocket health expenses for current seniors, fewer college loans and fewer health care options for young people, and the re-introduction of corporate outsourcing tax loopholes that have sent so many jobs overseas.

The Center for American Progress Action Fund examined the economic and tax agenda of Gov. Romney and Rep. Ryan, taking a close look at how their policies would affect the way Floridians live and work. The price tag includes:

• Middle-class Floridians would pay more in taxes while millionaires pay less. Millionaires in the state would receive an additional $87,000 in tax breaks under the tax plans of Gov. Romney and Rep. Ryan while middle-class families would pay up to $2,200 more in health care taxes and $1,066 more in taxes on their mortgages.
• Jobs would decline across Florida. Gov. Romney and Rep. Ryan plan to provide extra tax incentives for corporations to outsource jobs and are pushing policy proposals to cripple the clean energy industry, jeopardizing 95,000 jobs across the state.
• Drastic cuts to federal spending would shrink Florida’s middle class. The state stands to lose more than $117 billion in federal funding from 2013 through 2022, an average of more than $11.7 billion a year, from cuts to schools, law enforcement, highway repairs, job-training programs and more. These cuts would fall predominantly on middle-class and low-income families, especially cuts to education programs that would result in nearly $361 million in reduced federal support for education and job training in the state in 2013 and $834 million in 2014 alone.
• Seniors in Florida would lose health care benefits and pay more. Gov. Romney and Rep. Ryan would force seniors in the state to pay at least $632 more for their prescription drugs each year. At the same time, the Romney-Ryan plan to turn Medicare into a voucher would cost current seniors at least $11,000 more out of pocket.
• Women in Florida would pay more for health care but receive less bang for their buck. Gov. Romney and Rep. Ryan would once again allow insurance companies to charge women more than men while taking away preventive care from 2.5 million women in the state.
• Young adults in Florida would lose access to their families’ health insurance. Gov. Romney and Rep. Ryan promise to dismantle Obamacare, which would directly result in 224,000 young adults in Florida losing the insurance they have today due to the Affordable Care Act.

The Romney-Ryan plan asks the vast majority of Americans to pay more, and then spends this revenue not on balancing the budget but rather on more tax breaks for the richest Americans. Gov. Romney’s top direct donor would receive more than $2 billion in direct tax benefits from under the Romney-Ryan plan, while a typical police officer in Tampa earns $57,490 a year and would see their taxes increase by $1,480. These lopsided priorities are not a coincidence or a cruel joke. They are the logical extension of a trickle-down economic policy that failed under President George W. Bush but would be revived by Gov. Romney and Rep. Ryan.

President Obama and Vice President Biden, in contrast, believe that economic growth comes from a strong middle class, rather than being passed down from the wealthiest. They have passed and seek greater investments in education, job-training, infrastructure development, and scientific research and development to boost our nation’s long-term economic competiveness, coupled with targeted cuts in government spending and the end of the Bush-era tax cuts for the wealthiest Americans to bring the federal budget deficit under control.

The Republican contenders for the White House have tried to avoid details, but have nonetheless gone on the record with proposals that have enormous consequences for the economy, taxes, women’s health, health care, and energy security. The Center for American Progress Action Fund believes facts should matter in elections because they will certainly matter to families trying to live the American Dream. This report outlines the real cost of Romney-Ryan policies to Floridians.

It is tempting for people across Florida to start tuning out the election, defined too often by gaffes and thirty-second sound bites. But behind the politics are deep policy differences with profound consequences for the middle class.

Middle-class Floridians pay more in taxes while millionaires pay less

The linchpin of the economic strategy championed by Gov. Romney and Rep. Ryan is to further enrich the wealthiest by doubling down on conservative, top-down tax policies. Those tax policies—even more top heavy than those implemented by President George W. Bush, which led to the weakest job creation in the post-war era despite giving the richest Americans massive tax cuts—would further fuel the single biggest factor driving up our national debt. Gov. Romney proposes approximately $5 trillion in new tax cuts on top of the cost of extending all of the Bush-era tax cuts.

But instead of learning the lessons from past failed policies, Gov. Romney’s plan is to provide the wealthiest individuals and corporations with additional tax breaks, while asking the middle class, seniors, and students to pay even more.

Here’s how the Romney-Ryan tax plan would affect Floridians.

Raising taxes on middle-class Florida families

The tax plan of the two Republican candidates gives massive tax cuts to the richest Americans and corporations while purporting to collect the same amount of revenue as our current tax policies. The only way his plan adds up is by raising taxes on middle-class families in Florida and throughout the country. The nonpartisan Tax Policy Center found that Gov. Romney’s tax plan would require raising taxes on middle-class families with children who have incomes under $200,000 by an average of $2,000 per family. It would raise the average tax bill for all middle-class taxpayers by $500.

Their tax plan would raise taxes on low-income and middle-class families by forcing deep cuts in tax benefits such as the child tax credit, the mortgage interest deduction, the exemption for employer-provided health benefits, and the deduction for state and local taxes. Though Gov. Romney and Rep. Ryan repeatedly refuse to say which specific tax breaks they would eliminate or reduce, the Tax Policy Center calculates that these major tax benefits for middle-class families would have to be reduced by 58 percent to pay for his tax cut for the rich. That 58 percent cut does not even account for the fact that middle-class taxpayers would be forced to pay for the $1.1 trillion corporate tax cut also championed by the Republican ticket.

Here is how this hidden part of the Romney-Ryan tax plan would affect low-income and middle-class families in Florida:

• 7.8 million. The number of families in the state that rely on health insurance from their employer, which is currently not taxed.
• $1,300-2,200. The amount those middle-class families would pay in higher taxes if the exemption for employer health insurance is reduced by 58 percent.

• 1.7 million. The number of middle-class families in the state that file for the mortgage interest deduction on their federal taxes.
• $1,066. The average loss in mortgage interest deduction for middle-class families in the state if the deduction is cut by 58 percent.

• 2.2 million. The number of middle-class families in the state that deduct state and local taxes from their federal income taxes.
• $670. The amount on average that middle class families in the state will pay in higher taxes if the deduction for state and local taxes is cut by 58 percent.

• 1.2 million. The number of middle-class families in the state that benefit from the child tax credit.
• $580. The amount that families in the state will pay in higher taxes per child if the child tax credit is reduced by 58 percent.

• 386,000. The number of low-income and middle-class families in the state that claim the child care tax credit (in addition to the child tax credit detailed above).
• $318. The amount that families in the state will pay in higher taxes per child if the child care tax credit (in addition to the child tax credit detailed above) is reduced by 58 percent.

• 3.5 million. The number of low-income working families in the state that qualify for the earned income tax credit or the refundable portion of the child tax credit.
• $793. The tax increase for more than 975,000 of those families (with a total of 1.7 million children) would pay on average if the improvements to those tax credits passed under President Obama are rolled back, as the Romney-Ryan plan proposes.

• 717,000. The number of middle-class Florida families and students paying for college educations that use President Obama’s American Opportunity Tax Credit.
• $1,700. The average benefit these families and students receive from the American Opportunity Tax Credit. The Romney-Ryan tax plan would eliminate this credit, leaving families in the state with no credit or a less valuable tuition credit.

All these tax hikes on low-income and middle-class families would come courtesy of the Romney-Ryan tax plan’s overarching emphasis on providing even more tax breaks to the top income earners in our country. Their plan would force middle-class families to pay more in taxes than they do today so that the richest among us pay less.

The bottom line for Floridians: The 19,000 millionaires in the state would see an additional tax cut of at least $87,000. The total costs for these tax cuts for all the citizens of the state would be at least $1.7 billion.

Jobs would decline across Wisconsin

Gov. Romney famously argued that we should have “let Detroit go bankrupt,” never mind the consequences for workers. The Romney-Ryan plan takes the same approach to job creation, which would be devastating to our economy and the lives of tens of millions of Americans. The Romney-Ryan plan for job creation is so out of touch with what’s best for our country because it relies on the same top-down economics that created the worst job growth in decades under President George W. Bush.

Gov. Romney and Rep. Ryan claim they will create 12 million new jobs by the end of 2016, the end of their presumptive first term. In fact, their proposal would kill 360,000 jobs next year alone. Most telling, their plan includes even greater tax incentives for outsourcing that would actively undermine U.S. employment, leading to 800,000 more jobs being created in foreign countries.

Here’s what it would mean for Florida.

Letting the auto industry go bankrupt

The auto industry is vital to the health of our economy. President Obama’s decision to save the U.S. auto industry prevented the immediate loss of over 1 million American jobs across the country and up to 35,000 in Florida.

And now the auto industry is roaring back. General Motors Co. is once again the largest automaker in the world. The industry in total has added over 236,000 jobs since June 2009. In addition, another 31,000 jobs are projected to be created in Florida specifically because of new fuel economy standards finalized last month. The Romney-Ryan campaign denounced the standards, which will save the average American family $8,000 once fully implemented, as “extreme.”

How clean energy helped power new jobs in the state

Gov. Romney and Rep. Ryan present a clear vision for America’s energy future. They want more lucrative tax breaks for Big Oil companies and their allies while slashing investments in clean energy technologies that create U.S. jobs and keep the United States competitive in the global marketplace.

Instead of investing in the growing clean energy future and acknowledging the benefits of clean energy to Florida’s economy and health of its residents, the Romney-Ryan clean energy plan is to attack the industry and undermine its growth, calling green jobs “illusory.”

Florida could greatly benefit from the development of renewable energy since its home electricity consumption rate is one of the highest in the nation. In fact, Florida is currently producing enough solar energy to power nearly 30,000 homes and is ranked 18th among states for total installed solar capacity. Plus, there are more than 300 solar companies in Florida helping create jobs. The city of Gainesville, Florida, is a world leader in per-capita solar installation, beating out Japan, France, China, and even sunny California in installations per resident. Contrary to Gov. Romney’s claims, Florida is situated to receive significant economic, job, and public health gains by increasing its own renewable energy resources. There are more than 95,000 green jobs in Florida according to the U.S. Bureau of Labor Statistics, and nationwide the sector employs more than 3 million Americans.

The Romney-Ryan plan also calls for increased oil and gas drilling off the coasts of Virginia, Florida, and North Carolina, threatening the coastal industries that support millions of jobs and billions of dollars in economic benefits. Tourism is Florida’s leading ocean industry—it employs nearly 300,000 people, generating $5.9 billion in wages, and adding $13.3 billion annually to its gross domestic product. This is why Floridians have long been wary of offshore drilling and its potential to kill the tourism industry—the goose that lays the state’s golden eggs. Even in the face of mounting pressure to open more areas to drilling, Florida has maintained a two-decade-old ban on drilling in state waters.

Another component of the Romney-Ryan energy plan is to hand the keys to America’s public lands to drilling and mining companies by giving states control of energy development on public lands, which could have serious impacts on some of Florida’s treasured places. Areas like Everglades National Park and Big Cypress National Preserve may be some of the places that feel the results of this plan. Data requested from the National Park Service show that already there is oil and gas development within Big Cypress, and in the future it could occur in the Everglades. Under a Romney administration, assumedly the state would have control over whether or not to permit further drilling in these areas. Additionally, the Romney plan allows for state environmental laws to be considered to be sufficient in lieu of federal regulations. In effect, the plan circumvents the public comment process for drilling in national parks as is currently required by law.

Floridians understand that these lands that belong to all Americans have multiple uses, such as hunting, fishing, offroad vehicle use, and recreation. The Romney-Ryan plan for energy development on public lands, however, threatens to potentially making oil and gas drilling the primary use of public lands in the region.

Renewable electricity has nearly doubled under the Obama administration, and the clean energy economy grew by 8.3 percent from 2003–2010—almost double the overall economy’s growth during those years—but Gov. Romney’s plan threatens millions of jobs, our public lands, and the vital tourism industry in Florida.

Drastic cuts to federal spending would shrink Florida’s middle class

Gov. Romney and Rep. Ryan promise enormous cuts in overall federal spending, totaling more than $4 trillion over 10 years. At the same time, they have promised enormous amounts of new spending for the Pentagon—more money, in fact, than the Pentagon itself says it needs. They’ve also offered assurances that there will be no cuts to Medicare or Social Security for those over the age of 55, a promise at odds with their vow to repeal the Affordable Care Act, which improved Medicare benefits and lowered costs for current seniors. But taken together, these promises necessarily mean that the entire bulk of the Romney-Ryan spending cuts will necessarily fall on the remaining 40 percent of the budget. And unfortunately for states, nearly all of their federal funding can be found in that remaining 40 percent.

In 2010 Florida received nearly $25.4 billion in federal aid. This money helped support Florida’s schools, law enforcement efforts, highway repairs, and job-training programs. It helped put food on Florida families’ tables and it helped provide health insurance to nearly one in every five Floridians, including more than 2.1 million of Florida’s children. But that funding would be dramatically curtailed under the proposed budget policies of Gov. Romney and Rep. Ryan. In fact, their budget plan would cost Florida approximately $1.4 billion in federal funding in 2013 alone, and the costs to Florida would grow to almost $10 billion by 2016. (see Figure 1)

The simple math dictates that for the Romney-Ryan plan to achieve their spending goal, they will need to cut nearly all federal grants to the states by a staggering 40 percent by 2016. And that is in addition to the nearly 30 percent cut to Medicaid that would result from their plan to transform Medicaid into a block grant. Altogether, under the Romney-Ryan plan, Florida stands to lose more than $117 billion in federal funding from 2013 through 2022, an average of more than $11.7 billion a year. (see methodology)

Then there are the other federal programs that help low-income and middle-class families with their children’s education. The Romney-Ryan education plan, dubbed “A Chance for Every Child,” would eliminate federal requirements that low-performing schools take action to improve the education of their students, end the federal requirement that teachers obtain certification to teach, and privatize public education by turning federal funds for low-income and special-needs students into vouchers. Gov. Romney and Rep. Ryan would also sharply defund the Pell Grant for aspiring college students from poor families.

In Florida the consequences would be devastating. Under the Romney-Ryan plan:

• The Head Start program for pre-Kindergarten children would be crippled. Under their plan, in 2013 alone Head Start in Florida would lose $40 million, resulting in 5,588 slots for children eliminated and 2,066 job losses. In 2014 those numbers jump to $93 million in cuts, resulting in 7,602 slots for children eliminated and 3,100 jobs lost.
• Special education funding would be slashed. Under their plan $107 million in cuts for special-education grants would result in the costs for 60,738 students’ special instruction being shifted to the states, jeopardizing their education and costing around 1,600 jobs to be lost. But in 2014, these cuts become even more drastic with the cuts increasing to $246 million, resulting in 139,403 children at risk of no longer having their classes and more than 3,800 jobs being cut.
• Big cuts for colleges and aspiring students. The Romney-Ryan budget would so severely restrict Pell Grant eligibility that more than 1 million low- and middle-income students would no longer be able to count on them to help pay for college. Cuts to these grants would be devastating to the 607,921 Florida students who depend upon them to further their education. The average Pell Grant to Florida students under the Romney-Ryan plan would be cut by about $820 a year.

Gov. Romney gave his answer to student’s needing money earlier this year during an appearance at Otterbein University, when he advised cash-strapped students to “borrow money if you have to from your parents.” He followed up this recommendation by recounting a story about a friend who borrowed $20,000 from his parents, not an opportunity most young people have. If not realistic, this advice is not entirely surprising, given that Gov. Romney paid for college by selling stock options given to him by his CEO father.

Seniors in Florida would lose health care benefits and pay more

Gov. Romney and Rep. Ryan plan to convert our nation’s Medicare program into a voucher system for people who are under 55 years of age. It is that simple. Their candidacy has become infamous for its startling determination to lie about President Obama’s plans for Medicare and the true nature of their own plan for the vital program. Under their plan, seniors beginning in 2023 would receive vouchers to purchase health insurance from either private insurance companies or from traditional Medicare. If premiums for traditional Medicare or the private plan they choose cost more than the voucher amount, then seniors would have to pay the difference themselves.

Gov. Romney and Rep. Ryan claim that no one over 55 will be affected by their plan to turn Medicare into a voucher. But that’s simply not true. The reason: Seniors across our country are already benefiting from changes to Medicare because of Obamacare.

More than 1.4 million—62.9 percent—of Florida seniors who rely on their Medicare benefits receive one or more preventive services—such as cancer screenings, diabetes testing, and bone density scans—free of charge through their Medicare plan. This is saving Florida seniors money each year and also providing them with the care needed to protect their health.

What’s more, Gov. Romney and Rep. Ryan would open up the prescription drug donut hole that Obamacare is closing. Since the law was enacted, Florida seniors have saved $259.9 million on prescription drug costs because Obamacare is closing the loophole. In 2012 alone, more than 125,000 Florida seniors and people with disabilities saved $79.2 million. While they each have saved an average of $632 this year, Gov. Romney and Rep. Ryan would force them to once again pay for this out of pocket.

Because of the increased drug costs and higher Medicare premiums, the Romney-Ryan voucher plan would raise health care costs for current seniors by $11,000 for the average person who is 65 years old today. And it’s even worse for the future seniors. Because of cost shifting and increases in system-wide health care costs, Medicare costs for future seniors who become eligible for Medicare after 2022 will increase dramatically under the Romney-Ryan plan. Specifically, upon retirement:

• Today’s 54-year-old will have to pay increased Medicare costs of $59,450
• Today’s 49-year-old will have to pay $124,626 more
• Today’s 39-year-old will have to pay $216,631 more
• Today’s 29-year-old will have to pay $331,170 more

These estimates are conservative because we examined the least radical of the various Romney-Ryan proposals to calculate our estimates. Had we instead used the budget plan authored by Rep. Ryan for the House of Representatives in 2011, the nonpartisan Congressional Budget Office estimates it would result in increased costs that are much greater, forcing current seniors to pay $6,400 more per year for their health care costs.

Women in Florida would pay more for health care but receive less bang for their buck

Make no mistake, whether we’re talking about women’s health or reproductive rights, Gov. Romney and Rep. Ryan want to take women backward. Women’s health has been under constant siege since Republicans overtook the House of Representatives and some additional state governments in the 2010 midterm elections. Rep. Cliff Stearns (R-FL) even led the witch hunt in Congress that resulted in the Susan G. Komen Foundation’s decision to temporarily defund Planned Parenthood before it reversed course after a national outcry.

Indeed, the Republican record includes the all-male U.S. congressional panel debating insurance coverage for contraception, 33 attempts to repeal the health reform law and all of its benefits for women, vaginal probes in Virginia and elsewhere, and efforts to defund Planned Parenthood clinics around the country. Gov. Romney and Rep. Ryan even endorse the radical “personhood” measures that would outlaw abortion in all circumstances and could potentially ban common forms of birth control and in-vitro fertilization. Fortunately, Floridians are not at all enamored with this position—a group attempting to put a personhood measure on the ballot in Florida this year collected just 3 percent of the signatures needed to do so.

Yet Gov. Romney and Rep. Ryan want to launch a more broadly insidious campaign against women’s health. If elected president, Gov. Romney promises to repeal the Affordable Care Act “on day one” of his presidency. Why is Obamacare so important to women’s health? Due largely to the high cost of health insurance coverage—especially for women without access to employer-based coverage—19 million American women between the ages of 18 and 64 were uninsured in 2011, including almost 1.5 million women in Florida.

Even if insured, women tend to have higher out-of-pocket costs than men. Women of reproductive age spend 68 percent more than men on health care expenses. And more than half of American women report delaying needed medical care because of cost, while one-third of women report giving up basic necessities such as food, heat, or rent to pay for health care expenses. In 2014 the health care law will prohibit insurance companies from their practice of routinely denying women coverage for gender-related pre-existing conditions such as breast cancer, a Cesarean section, domestic violence, or sexual assault. And Obamacare has already prohibited insurance companies from continuing to deny coverage to the 259,300 Florida children who have a pre-existing condition.

Obamacare also makes health care more affordable by guaranteeing no-cost coverage for recommended preventive services such as mammograms, Pap smears, well-baby care, contraception, gestational diabetes screening, lactation supports, and much more. Approximately 47 million women will have access to women’s preventive services without cost-sharing under the Affordable Care Act, including nearly 2.5 million women in Florida.

Women without employer-based insurance coverage have it particularly hard in the so-called individual health insurance market, which discriminates against women in numerous ways and which Gov. Romney and Rep. Ryan want to maintain. Women are often charged much more for their health insurance coverage solely because of their gender, a practice known as gender rating. In fact, women currently pay $1 billion more than men each year in health insurance premiums in the individual market for the same benefit. Because Florida law does not prohibit or limit insurers from charging women more, if Gov. Romney and Rep. Ryan succeed in repealing the health care law, women would once again face higher costs simply because of their gender.

Young adults in Florida would lose access to their families’ health insurance

The Millennial generation of Americans born in the late 1970s and early 1980s also face staggering costs and loss of care from the Romney-Ryan plan for health care. Gov. Romney’s promise to dismantle Obamacare would result in 224,000 young adults in Florida losing the access they have today to their families’ health insurance due to the Affordable Care Act. And because of the Romney-Ryan plan to turn Medicare into a voucher program, today’s average 29 year old will have to save $331,200 more to afford their health care upon retirement under the Romney-Ryan plan.

Conclusion

The 2012 presidential election offers two contrasting visions of how our country should work. President Obama and Vice President Biden seek to restore the shared prosperity that once defined the growth of our nation’s middle class while Gov. Romney and Rep. Ryan want to return to the trickle-down economic policies of the Bush era, which led inexorably to the Great Recession.

The contrast is clear. It’s no exaggeration to say the future growth and prosperity of Florida’s middle class is at stake. The decision made in this election will determine the strength of the state’s middle class and the course our country takes not just over the next two or four years but for decades to come.

President Obama and Vice President Biden are clear in their plans to restore shared prosperity. Gov. Romney and Rep. Ryan are much less open about their policy intentions, yet as this brief demonstrates, what they have unveiled enables us to examine the consequences in telling detail. In Florida and across our nation, low-income and middle-class Americans would sacrifice for the greater benefit of the wealthiest under the Romney-Ryan plan for the economy, taxes, and health care. In contrast, the Obama-Biden plan asks for shared sacrifice and shared prosperity that is necessary to grow our middle class and preserve our global economic competitiveness well into the 21st century.

Methodology

In order to estimate the effect of the spending plans of Republican presidential and vice presidential contenders Gov. Mitt Romney (R-MA) and Rep. Paul Ryan (R-WI) on federal funding for states, we begin by estimating the percentage cut in overall spending that would be required given their stated spending proposals. For federal spending they propose to:

• Cap all federal spending at 20 percent of gross domestic product
• Increase defense spending to 4 percent of gross domestic product
• Make no cuts to Medicare or Social Security in the next 10 years
• Repeal the Affordable Care Act, including the Medicare savings, which would increase Medicare spending by more than $700 billion
• Transform Medicaid into block grants to the states

In order to comply with the Romney-Ryan spending cap after accounting for the spending effects of the other policy proposals, the former Massachusetts governor and House Budget Committee chairman would need to cut all other federal spending—that is spending aside from Social Security, Medicare, Medicaid, defense, and net interest—by about 11 percent in 2013, growing to 63 percent by 2022, for an annual average of 39 percent over the next 10 years. These calculations rely on the following assumptions:

• The Romney-Ryan plan would reduce federal spending to fully comply with their proposed spending cap by the end of 2016.
• From 2013 through 2015 their plan would reduce overall federal spending to levels consistent with the House Republican budget plan, authored by Rep. Ryan.
• The Romney-Ryan plan to turn Medicaid into a block grant will be roughly consistent with Rep. Paul Ryan’s plan as detailed in his most recent budget plan.
• The baseline, against which the percentage cuts are calculated, includes a permanent fix to the Medicare Sustainable Growth Rate formula, a repeal of the “sequester” automatic spending cuts, and the drawdown of U.S. military forces in overseas combat operations.

In order to estimate how these cuts would specifically impact states, we started with U.S. Census Bureau data on federal aid to states in fiscal year 2010—the most recent year available. We then extrapolated fiscal year 2013 through 2022 funding by using the most recent Congressional Budget Office baseline estimates. For mandatory grants we used CBO’s spending growth projections specific to those particular programs. For discretionary grants we used the general growth projections for nondefense discretionary spending.

Since nearly all federal grants to states, with the notable exception of Medicaid, fall into the “other federal spending” category, we applied the annual percentage cut required to comply with the Romney-Ryan plan’s proposed cap to the baseline projections of all non-Medicaid grants. But since their plan has a separate policy for Medicaid, we did not apply the “across-the-board” percentage cut to that program. Instead, for Medicaid, we applied the annual percentage cut that would occur under the “block grant” proposal from Rep. Ryan that is broadly similar to Gov. Romney’s outlined proposal. This cut also includes the effect of repealing the Affordable Care Act.

SOURCE: AP/Gerald Herbert

In this November 10, 2008, file photo, President George W. Bush walks with President-elect Barack Obama down the Colonnade of the White House in Washington.

The 2012 presidential race is entering its final stretch and the economy remains the key issue both for the candidates and for voters. The question of whether Americans are better off than they were four years ago remains a critical benchmark as the election nears. The data leave no doubt, however, that Americans are better off now than we were in the fall of 2008.

Over the past four years, aggressive actions taken by the federal government—including the economic stimulus package and the rescue of the auto industry—succeeded in turning our economy around and putting our nation back on the right economic path. More work is clearly necessary to strengthen the current economic recovery and accelerate much-needed job gains, but the economy is undoubtedly on the right track and remarkably robust in the face of tremendous obstacles—among them the lingering European financial crisis, slowing growth in China, high oil prices, and continued massive household debt levels.

Four years ago, in the final year of then-President George W. Bush’s second term in office, the consequences of conservative top-down economic policies became all too obvious, bringing the country to the brink of another Great Depression. The financial crisis sparked by rising home mortgage foreclosures in 2006 gained speed in 2007 and morphed into a serious recession in 2008 that gained downward speed by the day:

• Mortgage foreclosures mounted swiftly
• Job losses accelerated rapidly
• Economic growth reversed course
• Manufacturing production shrank quickly
• Corporate profits fell precipitously
• The stock market dropped rapidly
• Household wealth declined sharply

In short, our economy and financial markets went into a tailspin in the second half of 2008 due to the consequences of conservative economic policies aggressively implemented by the Bush administration.

Compare this to the economic situation today:

• The U.S. economy has added jobs for 31 consecutive months
• The economy has been growing since June 2009
• Manufacturing has been on the upswing
• Corporate profits have risen sharply
• The stock market has added healthy gains
• Foreclosures are finally falling
• Household wealth is continuing to expand

Instead of a second Great Depression, the actions of President Barack Obama’s administration resulted in our economy exiting what became known as the Great Recession of 2007–2009 within the first six months of his term.

Christian E. Weller is a Senior Fellow at the Center for American Progress, and a professor in the department of public policy and public affairs at the University of Massachusetts Boston.

SOURCE: AP/ Steven Senne

Jeanine Hamilton, right, owner of Hire Partnership, a staffing company, interviews Reidan Fredstrom, of Medford, Massachusetts, left, at Hamilton's office in downtown Boston.

This article was originally published in MarketWatch.

The economy added 114,000 jobs last month, on top of an upward revision of 86,000 jobs to July and August. The private sector has added jobs for 31 consecutive months.

After coming into office in depths of the Great Recession, President Barack Obama has seen more than a million private-sector jobs created over his first term. For the first time since he took office, the unemployment rate is below 8%, hitting 7.8% in September.

It is clear that the American Recovery and Reinvestment Act of 2009, support for the auto industry, and other policies implemented in the 111th Congress in 2009 and 2010 were the right path forward.

Returning to supply-side economic policies, as Republican presidential candidate Mitt Romney advocates, will not only stymie job creation but also risk pulling the economy backward, as these were the very same policies that got us into this mess in the first place.

Deficit spending has been effective in boosting job creation. In 2008 the economy began hemorrhaging jobs, and by the winter of 2008–2009, the economy was shedding more than 20,000 jobs per day, more than at any point since the Bureau of Labor Statistics began tabulating these data in 1948.

The Recovery Act led to a rapid reversal in the number of layoffs, and starting in March 2010, the economy saw jobs being added each month.

Since February 2010 the economy has added 4.3 million total payroll jobs, which rises to 4.6 million if we include the additional 386,000 jobs created as of March 2012, according to preliminary data from the Bureau of Labor Statistics’ annual benchmark revision process. Including the revisions, private payrolls are up more than a million since the inauguration.

The Recovery Act not only provided a needed boost to demand but it was the right thing to do for the millions of families left without a breadwinner when the financial industry imploded.

Moreover, during the dark days of the Great Recession, in 2008 and 2009, the U.S. automobile industry looked like it might collapse. The federal government, however, stepped in and provided $80 billion in aid, with a clear plan for those funds to be repaid. So far, about half of these grants and loans have been repaid and the automobile industry has added 152,300 jobs since June 2009.

Even as private-sector jobs have grown, however, the decline in public-sector employment is holding our economy back. The economy has lost nearly 700,000 public-sector jobs since April 2009. Our unemployment rate would be at least a full point lower without those losses. Since the Republicans took control of the House of Representatives in 2011 they have blocked all efforts to help support public-sector jobs for teachers, police officers and fire fighters.

Last month’s decline in the unemployment rate was driven by large reported employment gains, with 873,000 people indicating they got a job in September. This is an exceptionally large one-month gain in reported employment, and therefore we should interpret it carefully.

Higher employment is consistent with data from the establishment survey, however, and while the pace of reported employment in the household survey will likely be slower in the months to come, it is clear that employment is rising.

There are other indications that more people are finding employment: The share of those who are out of work who voluntary quit their job, rather than getting laid off, rose to 7.9%, and the number of discouraged workers fell from just more than a million down to 802,000 over the past year. However, 582,000 people newly indicated they were working part-time because of slack work or business conditions, which means that not all those finding work are finding the kind of work they would like to have.

Both men and women reported increased employment, with 67.5% of adult men (ages 20 and over) reporting having a job in September — up from 67% a year ago — and 55.1% of adult women reporting having a job — up from 55% a year ago. Employment grew most for workers with some college or more, while falling for workers with only a high school diploma.

Alongside hiring, wages grew by 7 cents in September for an annualized quarterly rate of growth of 1.6%. However, this means workers are not seeing real earnings gains, as the rate of inflation over the past year — as measured by the consumer price index for all urban consumers — rose by 1.8%.

In short, in the wake of a massive recession caused by a financial crisis, like the one we have lived through in recent years, the best antidote to high unemployment is deficit spending until the unemployment rate comes down.

Heather Boushey is a Senior Economist at the Center for American Progress Action Fund.

SOURCE: AP/Jeffrey Phelps

Republican presidential candidate Mitt Romney, right, is introduced by vice-presidential running mate Rep. Paul Ryan (R-WI) during a rally in Waukesha, Wisconsin, Sunday, August 12, 2012.

View infographic: “The Real Cost of the Romney-Ryan Plan to Wisconsinites.”

View infographic: “Mitt Romney’s Dangerous Agenda for Wisconsin Women and their Families.”

Endnotes and citations are available in the PDF version of this issue brief.

Behind dramatically different economic visions and a deluge of attack ads, this election comes down to numbers. Many Wisconsinites—and many families across the United States—are asking what this will mean at the kitchen table. What will be the cost of a second term of President Barack Obama and Vice President Joe Biden or a first term led by former Massachusetts Gov. Mitt Romney and his running mate, Rep. Paul Ryan (R-WI)? The answer is that, in concrete and quantifiable ways, a Romney-Ryan presidency would mean higher taxes for the middle class, out-of-pocket health expenses for current seniors, fewer college loans and fewer health care options for young people, and the re-introduction of corporate outsourcing tax loopholes that have sent so many jobs overseas.

The nonprofit organization, the Center for American Progress Action Fund, examined the economic and tax agenda of Gov. Romney and Rep. Ryan, taking a close look at how their policies would affect the way Wisconsinites live and work. The price tag includes:

• Middle-class Wisconsinites would pay more in taxes while millionaires pay less. Millionaires in the state would receive an additional $87,000 in tax breaks under the tax plans of Gov. Romney and Rep. Ryan while middle-class families would pay up to $2,100 more in health care taxes and $1,066 more in taxes on their mortgages.
• Jobs would decline across Wisconsin. Gov. Romney and Rep. Ryan plan to provide extra tax incentives for corporations to outsource jobs and are pushing policy proposals to cripple the clean energy industry, jeopardizing nearly 60,000 jobs across the state.
• Drastic cuts to federal spending would shrink Wisconsin’s middle class. The state stands to lose more than $44 billion in federal funding from 2013 through 2022, an average of more than $4.5 billion a year, from cuts to schools, law enforcement, highway repairs, job-training programs and more. These cuts would fall predominantly on middle-class and low-income families, especially cuts to education programs that would result in nearly $132 million in reduced federal support for education and job training in the state in 2013 and $304 million in 2014 alone.
• Seniors in Wisconsin would lose health care benefits and pay more. Gov. Romney and Rep. Ryan would force seniors in the state to pay at least $670 more for their prescription drugs each year. At the same time, the Romney-Ryan plan to turn Medicare into a voucher would cost current seniors at least $11,000 more out of pocket.
• Women in Wisconsin would pay more for health care but receive less bang for their buck. Gov. Romney and Rep. Ryan would once again allow insurance companies to charge women more than men while taking away preventive care from nearly a million women in the state.
• Young adults in Wisconsin would lose access to their families’ health insurance. Gov. Romney and Rep. Ryan promise to dismantle Obamacare, which would directly result in 43,000 young adults in Wisconsin losing the insurance they have today due to the Affordable Care Act.

The Romney-Ryan plan asks the vast majority of Americans to pay more, and then spends this revenue not on balancing the budget but rather on more tax breaks for the richest Americans. Gov. Romney’s top direct donor would receive over $2 billion in direct tax benefits from under the Romney-Ryan plan, while a typical police officer in Milwaukee earning $56,740 a year or a police officer in Janesville earning $55,400 a year would see their taxes increase by $1,465 or $1,505 respectively. These lopsided priorities
are not a coincidence or a cruel joke. They are the logical extension of a trickle-down economic policy that failed under President George W. Bush but would be revived by Gov. Romney and Rep. Ryan.

President Obama and Vice President Biden, in contrast, believe that economic growth comes from a strong middle class, rather than being passed down from the wealthiest. They have passed and seek greater investments in education, job-training, infrastructure development, and scientific research and development to boost our nation’s long-term economic competiveness, coupled with targeted cuts in government spending and the end of the Bush-era tax cuts for the wealthiest Americans to bring the federal budget deficit under control.

The Republican contenders for the White House have tried to avoid details, but have nonetheless gone on the record with proposals that have enormous consequences for the economy, taxes, women’s health, health care, and energy security. The Center for American Progress Action Fund believe facts should matter in elections because they will certainly matter to families trying to live the American Dream. This report outlines the real cost of Romney-Ryan policies to Wisconsinites.

It is tempting for people across Wisconsin to start tuning out the election, defined too often by gaffes and thirty-second sound bites. But behind the politics are deep policy differences with profound consequences for the middle class.

Middle-class Wisconsinites pay more in taxes while millionaires pay less

The linchpin of the economic strategy championed by Gov. Romney and Rep. Ryan is to further enrich the wealthiest by doubling down on conservative, top-down tax policies. Those tax policies—even more top heavy than those implemented by President George W. Bush, which led to the weakest job creation in the post-war era despite giving the richest Americans massive tax cuts—would further fuel the single biggest factor driving up our national debt. Gov. Romney proposes approximately $5 trillion in new tax cuts on top of the cost of extending all of the Bush-era tax cuts.

But instead of learning the lessons from past failed policies, Gov. Romney’s plan is to provide the wealthiest individuals and corporations with additional tax breaks, while asking the middle class, seniors, and students to pay even more.

Here’s how the Romney-Ryan tax plan would affect Wisconsinites.

Raising taxes on middle-class Wisconsin families

The tax plan of the two Republican candidates gives massive tax cuts to the richest Americans and corporations while purporting to collect the same amount of revenue as our current tax policies. The only way his plan adds up is by raising taxes on middle-class families in Wisconsin and throughout the country. The nonpartisan Tax Policy Center found that Gov. Romney’s tax plan would require raising taxes on middle-class families with children who have incomes under $200,000 by an average of $2,000 per family. It would raise the average tax bill for all middle-class taxpayers by $500.

Their tax plan would raise taxes on low-income and middle-class families by forcing deep cuts in tax benefits such as the child tax credit, the mortgage interest deduction, the exemption for employer-provided health benefits, and the deduction for state and local taxes. Though Gov. Romney and Rep. Ryan repeatedly refuse to say which specific tax breaks they would eliminate or reduce, the Tax Policy Center calculates that these major tax benefits for middle-class families would have to be reduced by 58 percent to pay for his tax cut for the rich. That 58 percent cut does not even account for the fact that middle-class taxpayers would be forced to pay for the $1.1 trillion corporate tax cut also championed by the Republican ticket.

Here is how this hidden part of the Romney-Ryan tax plan would affect low-income and middle-class families in Wisconsin:

• 3.1 million. The number of families in the state that rely on health insurance from their employer, which is currently not taxed.
• $1,300-2,100. The amount those middle-class families would pay in higher taxes if the exemption for employer health insurance is reduced by 58 percent.

• 761,000. The number of middle-class families in the state that file for the mortgage interest deduction on their federal taxes.
• $1,066. The average loss in mortgage interest deduction for middle-class families in the state if the deduction is cut by 58 percent.

• 946,000. The number of middle-class families in the state that deduct state and local taxes from their federal income taxes.
• $670. The amount on average that middle class families in the state will pay in higher taxes if the deduction for state and local taxes is cut by 58 percent.

• 462,000. The number of middle-class families in the state that benefit from the child tax credit.
• $580. The amount that families in the state will pay in higher taxes per child if the child tax credit is reduced by 58 percent.

• 99,000. The number of low-income and middle-class families in the state that claim the child care tax credit (in addition to the child tax credit detailed above).
• $318. The amount that families in the state will pay in higher taxes per child if the child care tax credit (in addition to the child tax credit detailed above) is reduced by 58 percent.

• 678,000. The number of low-income working families in the state that qualify for the earned income tax credit or the refundable portion of the child tax credit.
• $898. The tax increase for 155,000 of those families (with a total of 320,000 children) would pay on average if the improvements to those tax credits passed under President Obama are rolled back, as the Romney-Ryan plan proposes.

• 159,000. The number of middle-class Wisconsin families and students paying for college educations that use President Obama’s American Opportunity Tax Credit.
• $2,100. The average benefit these families and students receive from the American Opportunity Tax Credit. The Romney-Ryan tax plan would eliminate this credit, leaving families in the state with no credit or a less valuable tuition credit.

All these tax hikes on low-income and middle-class families would come courtesy of the Romney-Ryan tax plan’s overarching emphasis on providing even more tax breaks to the top income earners in our country. Their plan would force middle-class families to pay more in taxes than they do today so that the richest among us pay less.

The bottom line for Wisconsinites: The 3,400 millionaires in the state would see an additional tax cut of at least $87,000. The total costs for these tax cuts for all the citizens of the state would be at least $298 million.

Jobs would decline across Wisconsin

Gov. Romney famously argued that we should have “let Detroit go bankrupt,” never mind the consequences for workers. The Romney-Ryan plan takes the same approach to job creation, which would be devastating to our economy and the lives of tens of millions of Americans. The Romney-Ryan plan for job creation is so out of touch with what’s best for our country because it relies on the same top-down economics that created the worst job growth in decades under President George W. Bush.

Gov. Romney and Rep. Ryan claim they will create 12 million new jobs by the end of 2016, the end of their presumptive first term. In fact, their proposal would kill 360,000 jobs next year alone. Most telling, their plan includes even greater tax incentives for outsourcing that would actively undermine U.S. employment, leading to 800,000 more jobs being created in foreign countries.

Here’s what it would mean for Wisconsin.

Letting the auto industry go bankrupt

The auto industry is vital to the health of our economy. President Obama’s decision to save the U.S. auto industry prevented the immediate loss of over 1 million American jobs across the country and up to 28,000 in Wisconsin.

And now the auto industry is roaring back. General Motors Co. is once again the largest automaker in the world. The industry in total has added over 236,000 jobs since June 2009. In addition, another 10,000 jobs are projected to be created in Wisconsin specifically because of new fuel economy standards finalized last month. The Romney-Ryan campaign denounced the standards, which will save the average American family $8,000 once fully implemented, as “extreme.”

How clean energy helped power new jobs in the state

Gov. Romney and Rep. Ryan present a clear vision for America’s energy future. They want more lucrative tax breaks for Big Oil companies and their allies while slashing investments in clean energy technologies that create U.S. jobs and keep the United States competitive in the global marketplace.

Instead of investing in the growing clean energy economy and acknowledging the benefits of clean energy to Wisconsin’s economy and health of its residents, the Romney-Ryan clean energy plan is to attack the industry and undermine its growth, calling green jobs “illusory,” and opposing key wind tax credits that support thousands of jobs in Wisconsin.

There are nearly 60,000 clean energy jobs in Wisconsin, according to the U.S. Bureau of Labor Statistics, and nationwide the sector employs more than 3 million Americans. More than 2,000 of those jobs are wind jobs and Wisconsin is one of the top states that would benefit from extending the wind production tax credit. Wisconsin’s wind resources could produce over four times the state’s current electricity needs, according to the National Renewable Energy Lab resource assessment.

Wind is not the only clean energy source that is helping Wisconsin’s economy. Wisconsin is producing enough solar energy to power 1,600 homes, and there are 166 solar companies helping create jobs in the state.

Renewable electricity has nearly doubled under the Obama administration, and the clean energy economy grew by 8.3 percent from 2003 to 2010—almost double the overall economy’s growth during those years—but Gov. Romney’s plan threatens the nearly 60,000 clean energy jobs in Wisconsin and risks the creation of thousands more in the years to come.

Drastic cuts to federal spending would shrink Wisconsin’s middle class

Gov. Romney and Rep. Ryan promise enormous cuts in overall federal spending, totaling more than $4 trillion over 10 years. At the same time, they have promised enormous amounts of new spending for the Pentagon—more money, in fact, than the Pentagon itself says it needs. They’ve also offered assurances that there will be no cuts to Medicare or Social Security for those over the age of 55, a promise at odds with their vow to repeal the Affordable Care Act, which improved Medicare benefits and lowered costs for current seniors. But taken together, these promises necessarily mean that the entire bulk of the Romney-Ryan spending cuts will necessarily fall on the remaining 40 percent of the budget. And unfortunately for states, nearly all of their federal funding can be found in that remaining 40 percent.

In 2010 Wisconsin received nearly $9.6 billion in federal aid. This money helped support Wisconsin’s schools, law enforcement efforts, highway repairs, and job-training programs. It helped put food on Wisconsin families’ tables and it helped provide health insurance to about one in every five Wisconsinites, including nearly 600,000 of Wisconsin’s children. But that funding would be dramatically curtailed under the proposed budget policies of Gov. Romney and Rep. Ryan. In fact, their budget plan would cost Wisconsin approximately $522 million in federal funding in 2013 alone, and the costs to Wisconsin would grow to over $3.7 billion by 2016. (see Figure 1)

The simple math dictates that for the Romney-Ryan plan to achieve their spending goal, they will need to cut nearly all federal grants to the states by a staggering 40 percent by 2016. And that is in addition to the nearly 30 percent cut to Medicaid that would result from their plan to transform Medicaid into a block grant. Altogether, under the Romney-Ryan plan, Wisconsin stands to lose more than $44.5 billion in federal funding from 2013 through 2022, an average of more than $4.5 billion a year. (see methodology)

Then there are the other federal programs that help low-income and middle-class families with their children’s education. The Romney-Ryan education plan, dubbed “A Chance for Every Child,” would eliminate federal requirements that low-performing schools take action to improve the education of their students, end the federal requirement that teachers obtain certification to teach, and privatize public education
by turning federal funds for low-income and special-needs students into vouchers. Gov. Romney and Rep. Ryan would also sharply defund the Pell Grant for aspiring college students from poor families.

In Wisconsin the consequences would be devastating. Under the Romney-Ryan plan:

• The Head Start program for pre-Kindergarten children would be crippled. Under their plan, in 2013 alone Head Start in Wisconsin would lose $16 million, resulting in 2,473 slots for children eliminated and 1,080 job losses. In 2014 those numbers jump to $36 million in cuts, resulting in 4,828 slots for children eliminated and 2,397 jobs lost.
• Special education funding would be slashed. Under their plan $37 million in cuts for special-education grants would result in the costs for 21,076 students’ special instruction being shifted to the states, jeopardizing their education and costing around 400 jobs to be lost. But in 2014, these cuts become even more drastic with the cuts increasing to $85 million, resulting in 48,561 children at risk of no longer having their classes and more than 900 jobs being cut.
• Big cuts for colleges and aspiring students. The Romney-Ryan budget would so severely restrict Pell Grant eligibility that more than 1 million low- and middle-income students would no longer be able to count on them to help pay for college. Cuts to these grants would be devastating to the 127,650 Wisconsin students who depend upon them to further their education. The average Pell Grant to Wisconsin students under the Romney-Ryan plan would be cut by about $800 a year.

Gov. Romney gave his answer to students needing money earlier this year during an appearance at Otterbein University, when he advised cash-strapped students to “borrow money if you have to from your parents.” He followed up this recommendation by recounting a story about a friend who borrowed $20,000 from his parents, not an opportunity most young people have. If not realistic, this advice is not entirely surprising, given that Gov. Romney paid for college by selling stock options given to him by his CEO father.

Seniors in Wisconsin would lose health care benefits and pay more

Gov. Romney and Rep. Ryan plan to convert our nation’s Medicare program into a voucher system for people who are under 55 years of age. It is that simple. Their candidacy has become infamous for its startling determination to lie about President Obama’s plans for Medicare and the true nature of their own plan for the vital program. Under their plan, seniors beginning in 2023 would receive vouchers to purchase health insurance from either private insurance companies or from traditional Medicare. If premiums for traditional Medicare or the private plan they choose cost more than the voucher amount, then seniors would have to pay the difference themselves.

Gov. Romney and Rep. Ryan claim that no one over 55 will be affected by their plan to turn Medicare into a voucher. But that’s simply not true. The reason: Seniors across our country are already benefiting from changes to Medicare because of Obamacare.

In Wisconsin more than 325,971 seniors who rely on their Medicare benefits receive one or more preventive services—such as cancer screenings, diabetes testing, and bone density scans—free of charge through their Medicare plan. This is saving Wisconsin seniors money each year and also providing them with the care needed to protect their health.

What’s more, Gov. Romney and Rep. Ryan would open up the prescription drug donut hole that Obamacare is closing. Since the law was enacted, Wisconsin seniors have saved $24.4 million on prescription drug costs because Obamacare is closing the loophole. In 2012 alone, more than 33,000 Wisconsin seniors and people with disabilities saved $78.9 million. While they each have saved an average of $671 this year, Gov. Romney and Rep. Ryan would force them to once again pay for this out of pocket.

Because of the increased drug costs and higher Medicare premiums, the Romney-Ryan voucher plan would raise health care costs for current seniors by $11,000 for the average person who is 65 years old today. And it’s even worse for the future seniors. Because of cost shifting and increases in system-wide health care costs, Medicare costs for future seniors who become eligible for Medicare after 2022 will increase dramatically under the Romney-Ryan plan. Specifically, upon retirement:

• Today’s 54-year-old will have to pay increased Medicare costs of $59,450
• Today’s 49-year-old will have to pay $124,626 more
• Today’s 39-year-old will have to pay $216,631 more
• Today’s 29-year-old will have to pay $331,170 more

These estimates are conservative because we examined the least radical of the various Romney-Ryan proposals to calculate our estimates. Had we instead used the budget plan authored by Rep. Ryan for the House of Representatives in 2011, the nonpartisan Congressional Budget Office estimates it would result in increased costs that are much greater, forcing current seniors to pay $6,400 more per year for their health care costs.

Women in Wisconsin would pay more for health care but receive less bang for their buck

Make no mistake, whether we’re talking about women’s health or reproductive rights, Gov. Romney and Rep. Ryan want to take women backward. Women’s health has been under constant siege since Republicans overtook the House of Representatives and some additional state governments in the 2010 midterm elections.

Wisconsin Republicans have been eager to take on women’s health. Republicans in the legislature introduced a radical “personhood” measure that would outlaw abortion in all circumstances and could ban common forms of birth control and in-vitro fertilization. Gov. Scott Walker (R) signed a bill that defunded Planned Parenthood and blocked the ability of the group to provide cancer screenings.

Indeed, the Republican record includes the all-male U.S. congressional panel debating insurance coverage for contraception, 33 attempts to repeal the health reform law and all of its benefits for women, vaginal probes in Virginia and elsewhere, and efforts to defund Planned Parenthood clinics around the country. Gov. Romney and Rep. Ryan even endorse the radical “personhood” measures that would outlaw abortion in all circumstances and could potentially ban common forms of birth control and in-vitro fertilization.

Yet Gov. Romney and Rep. Ryan want to launch a more broadly insidious campaign against women’s health. If elected president, Gov. Romney promises to repeal the Affordable Care Act “on day one” of his presidency. Why is Obamacare so important to women’s health? Due largely to the high cost of health insurance coverage—especially for women without access to employer-based coverage—19 million American women between the ages of 18 and 64 were uninsured in 2011, including 170,600 women in Wisconsin.

Even if insured, women tend to have higher out-of-pocket costs than men. Women of reproductive age spend 68 percent more than men on health care expenses. And more than half of American women report delaying needed medical care because of cost, while one-third of women report giving up basic necessities such as food, heat, or rent to pay for health care expenses. In 2014 the health care law will prohibit insurance companies from their practice of routinely denying women coverage for gender-related pre-existing conditions such as breast cancer, a Cesarean section, domestic violence, or sexual assault. And Obamacare has already prohibited insurance companies from continuing to deny coverage to the 105,900 Wisconsin children who have a pre-existing condition.

Obamacare also makes health care more affordable by guaranteeing no-cost coverage for recommended preventive services such as mammograms, Pap smears, well-baby care, contraception, gestational diabetes screening, lactation supports, and much more. Approximately 47 million women will have access to women’s preventive services without cost-sharing under the Affordable Care Act, including nearly 967,875 women in Wisconsin.

Women without employer-based insurance coverage have it particularly hard in the so-called individual health insurance market, which discriminates against women in numerous ways and which Gov. Romney and Rep. Ryan want to maintain. Women are often charged much more for their health insurance coverage solely because of their gender, a practice known as gender rating. In fact, women currently pay $1 billion more than men each year in health insurance premiums in the individual market for the same benefit. Because Wisconsin law does not prohibit or limit insurers from charging women more, if Gov. Romney and Rep. Ryan succeed in repealing the health care law, women would once again face higher costs simply because of their gender.

Young adults in Wisconsin would lose access to their families’ health insurance

The Millennial generation of Americans born in the late 1970s and early 1980s also face staggering costs and loss of care from the Romney-Ryan plan for health care. Gov. Romney’s promise to dismantle Obamacare would result in 43,000 young adults in Wisconsin losing the access they have today to their families’ health insurance due to the Affordable Care Act. And because of the Romney-Ryan plan to turn Medicare into a voucher program, today’s average 29 year old will have to save $331,200 more to afford their health care upon retirement under the Romney-Ryan plan.

Conclusion

The 2012 presidential election offers two contrasting visions of how our country should work. President Obama and Vice President Biden seek to restore the shared prosperity that once defined the growth of our nation’s middle class while Gov. Romney and Rep. Ryan want to return to the trickle-down economic policies of the Bush era, which led inexorably to the Great Recession.

The contrast is clear. It’s no exaggeration to say the future growth and prosperity of Wisconsin’s middle class is at stake. The decision made in this election will determine the strength of the state’s middle class and the course our country takes not just over the next two or four years but for decades to come.

President Obama and Vice President Biden are clear in their plans to restore shared prosperity. Gov. Romney and Rep. Ryan are much less open about their policy intentions, yet as this brief demonstrates, what they have unveiled enables us to examine the consequences in telling detail. In Wisconsin and across our nation, low-income and middle-class Americans would sacrifice for the greater benefit of the wealthiest under the Romney-Ryan plan for the economy, taxes, and health care. In contrast, the Obama-Biden plan asks for shared sacrifice and shared prosperity that is necessary to grow our middle class and preserve our global economic competitiveness well into the 21st century.

Methodology

In order to estimate the effect of the spending plans of Republican presidential and vice presidential contenders Gov. Mitt Romney (R-MA) and Rep. Paul Ryan (R-WI) on federal funding for states, we begin by estimating the percentage cut in overall spending that would be required given their stated spending proposals. For federal spending they propose to:

• Cap all federal spending at 20 percent of gross domestic product
• Increase defense spending to 4 percent of gross domestic product
• Make no cuts to Medicare or Social Security in the next 10 years
• Repeal the Affordable Care Act, including the Medicare savings, which would increase Medicare spending by more than $700 billion
• Transform Medicaid into block grants to the states

In order to comply with the Romney-Ryan spending cap after accounting for the spending effects of the other policy proposals, the former Massachusetts governor and House Budget Committee chairman would need to cut all other federal spending—that is spending aside from Social Security, Medicare, Medicaid, defense, and net interest—by about 11 percent in 2013, growing to 63 percent by 2022, for an annual average of 39 percent over the next 10 years. These calculations rely on the following assumptions:

• The Romney-Ryan plan would reduce federal spending to fully comply with their proposed spending cap by the end of 2016.
• From 2013 through 2015 their plan would reduce overall federal spending to levels consistent with the House Republican budget plan, authored by Rep. Ryan.
• The Romney-Ryan plan to turn Medicaid into a block grant will be roughly consistent with Rep. Paul Ryan’s plan as detailed in his most recent budget plan.
• The baseline, against which the percentage cuts are calculated, includes a permanent fix to the Medicare Sustainable Growth Rate formula, a repeal of the “sequester” automatic spending cuts, and the drawdown of U.S. military forces in overseas combat operations.

In order to estimate how these cuts would specifically impact states, we started with U.S. Census Bureau data on federal aid to states in fiscal year 2010—the most recent year available. We then extrapolated fiscal year 2013 through 2022 funding by using the most recent Congressional Budget Office baseline estimates. For mandatory grants we used CBO’s spending growth projections specific to those particular programs. For discretionary grants we used the general growth projections for nondefense discretionary spending.

Since nearly all federal grants to states, with the notable exception of Medicaid, fall into the “other federal spending” category, we applied the annual percentage cut required to comply with the Romney-Ryan plan’s proposed cap to the baseline projections of all non-Medicaid grants. But since their plan has a separate policy for Medicaid, we did not apply the “across-the-board” percentage cut to that program. Instead, for Medicaid, we applied the annual percentage cut that would occur under the “block grant” proposal from Rep. Ryan that is broadly similar to Gov. Romney’s outlined proposal. This cut also includes the effect of repealing the Affordable Care Act.

SOURCE: AP/Charles Dharapak

Republican presidential candidate Mitt Romney campaigns at the Military Aviation Museum in Virginia Beach, Virginia, Saturday, September 8, 2012.

View infographic: “The Real Cost of the Romney-Ryan Plan to Virginians.”

View infographic: “Mitt Romney’s Dangerous Agenda for Virginia Women and their Families.”

Endnotes and citations are available in the PDF version of this issue brief.

Behind dramatically different economic visions and a deluge of attack ads, this election comes down to numbers. Many Virginians—and many families across the United States—are asking what this will mean at the kitchen table. What will be the cost of a second term of President Barack Obama and Vice President Joe Biden or a first term led by former Massachusetts Governor Mitt Romney and his running mate, Rep. Paul Ryan (R-WI)? The answer is that, in concrete and quantifiable ways, a Romney-Ryan presidency would mean higher taxes for the middle class, out-of-pocket health expenses for current seniors, fewer college loans and fewer health care options for young people, and the re-introduction of corporate outsourcing tax loopholes that have sent so many jobs overseas.

The nonprofit organizations ProgressVA and the Center for American Progress Action Fund examined the economic and tax agenda of Gov. Romney and Rep. Ryan, taking a close look at how their policies would affect the way Virginians live and work. The price tag includes:

• Middle-class Virginians would pay more in taxes while millionaires pay less. Millionaires in the state would receive an additional $87,000 in tax breaks under the tax plans of Gov. Romney and Rep. Ryan while middle-class families would pay up to $2,000 more in health care taxes and $1,066 more in taxes on their mortgages.
• Jobs would decline across Virginia. Gov. Romney and Rep. Ryan plan to provide extra tax incentives for corporations to outsource jobs and are pushing policy proposals to cripple the clean energy industry, jeopardizing 90,000 jobs across the state.
• Drastic cuts to federal spending would shrink Virginia’s middle class. The state stands to lose more than $46 billion in federal funding from 2013 through 2022, an average of more than $4.6 billion a year, from cuts to schools, law enforcement, highway repairs, job-training programs and more. These cuts would fall predominantly on middle-class and low-income families, especially cuts to education programs that would result in nearly $156 million in reduced federal support for education and job training in the state in 2013 and $361 million in 2014 alone.
• Seniors in Virginia would lose health care benefits and pay more. Gov. Romney and Rep. Ryan would force seniors in the state to pay at least $639 more for their prescription drugs each year. At the same time, the Romney-Ryan plan to turn Medicare into a voucher would cost current seniors at least $11,000 more out of pocket.
• Women in Virginia would pay more for health care but receive less bang for their buck. Gov. Romney and Rep. Ryan would once again allow insurance companies to charge women more than men while taking away preventive care from at least 1,376,205 women in the state.
• Young adults in Virginia would lose access to their families’ health insurance. Gov. Romney and Rep. Ryan promise to dismantle Obamacare, which would directly result in 66,000 young adults in Virginia losing the insurance they have today due to the Affordable Care Act.

The Romney-Ryan plan asks the vast majority of Americans to pay more, and then spends this revenue not on balancing the budget but rather on more tax breaks for the richest Americans. Gov. Romney’s top direct donor would receive over $2 billion in direct tax benefits from under the Romney-Ryan plan, while a typical police officer in Richmond making a little over $48,760 a year would see their taxes increase by $ 1,660. These lopsided priorities are not a coincidence or a cruel joke. They are the logical extension of a trickle-down economic policy that failed under President George W. Bush but would be revived by Gov. Romney and Rep. Ryan.

President Obama and Vice President Biden, in contrast, believe that economic growth comes from a strong middle class, rather than being passed down from the wealthiest. They have passed and seek greater investments in education, job-training, infrastructure development, and scientific research and development to boost our nation’s long-term economic competiveness, coupled with targeted cuts in government spending and the end of the Bush-era tax cuts for the wealthiest Americans to bring the federal budget deficit under control.

The Republican contenders for the White House have tried to avoid details, but have nonetheless gone on the record with proposals that have enormous consequences for the economy, taxes, women’s health, health care, and energy security. ProgressVA and the Center for American Progress Action Fund believe facts should matter in elections because they will certainly matter to families trying to live the American Dream. This report outlines the real cost of Romney-Ryan policies to Virginians.

It is tempting for people across Virginia to start tuning out the election, defined too often by gaffes and thirty-second sound bites. But behind the politics are deep policy differences with profound consequences for the middle class.

Middle-class Virginians pay more in taxes while millionaires pay less

The linchpin of the economic strategy championed by Gov. Romney and Rep. Ryan is to further enrich the wealthiest by doubling down on conservative, top-down tax policies. Those tax policies—even more top heavy than those implemented by President George W. Bush, which led to the weakest job creation in the post-war era despite giving the richest Americans massive tax cuts —would further fuel the single biggest factor driving up our national debt. Gov. Romney proposes approximately $5 trillion in new tax cuts on top of the cost of extending all of the Bush-era tax cuts.

But instead of learning the lessons from past failed policies, Gov. Romney’s plan is to provide the wealthiest individuals and corporations with additional tax breaks, while asking the middle class, seniors, and students to pay even more.

Here’s how the Romney-Ryan tax plan would affect Virginians.

Raising taxes on middle-class Virginia families

The tax plan of the two Republican candidates gives massive tax cuts to the richest Americans and corporations while purporting to collect the same amount of revenue as our current tax policies. The only way his plan adds up is by raising taxes on middle-class families in Virginia and throughout the country. The nonpartisan Tax Policy Center found that Gov. Romney’s tax plan would require raising taxes on middle-class families with children who have incomes under $200,000 by an average of $2,000 per family. It would raise the average tax bill for all middle-class taxpayers by $500.

Their tax plan would raise taxes on low-income and middle-class families by forcing deep cuts in tax benefits such as the child tax credit, the mortgage interest deduction, the exemption for employer-provided health benefits, and the deduction for state and local taxes. Though Gov. Romney and Rep. Ryan repeatedly refuse to say which specific tax breaks they would eliminate or reduce, the Tax Policy Center calculates that these major tax benefits for middle-class families would have to be reduced by 58 percent to pay for his tax cut for the rich. That 58 percent cut does not even account for the fact that middle-class taxpayers would be forced to pay for the $1.1 trillion corporate tax cut also championed by the Republican ticket.

Here is how this hidden part of the Romney-Ryan tax plan would affect low-income and middle-class families in Virginia:

• 4.3 million. The number of families in the state that rely on health insurance from their employer, which is currently not taxed.
• $1,200-2,000. The amount those middle-class families would pay in higher taxes if the exemption for employer health insurance is reduced by 58 percent.

• 1.1 million. The number of middle-class families in the state that file for the mortgage interest deduction on their federal taxes.
• $1,066. The average loss in mortgage interest deduction for middle-class families in the state if the deduction is cut by 58 percent.

• 1.4 million. The number of middle-class families in the state that deduct state and local taxes from their federal income taxes.
• $670. The amount on average that middle class families in the state will pay in higher taxes if the deduction for state and local taxes is cut by 58 percent.

• 610,000. The number of middle-class families in the state that benefit from the child tax credit.
• $580. The amount that families in the state will pay in higher taxes per child if the child tax credit is reduced by 58 percent.

• 171,000. The number of low-income and middle-class families in the state that claim the child care tax credit (in addition to the child tax credit detailed above).
• $318. The amount that families in the state will pay in higher taxes per child if the child care tax credit (in addition to the child tax credit detailed above) is reduced by 58 percent.

• 1.1 million. The number of low-income working families in the state that qualify for the earned income tax credit or the refundable portion of the child tax credit.
• $736. The tax increase for 275,000 of those families (with a total of almost 494,000 children) would pay on average if the improvements to those tax credits passed under President Obama are rolled back, as the Romney-Ryan plan proposes.

• 231,000. The number of middle-class Virginia families and students paying for college educations that use President Obama’s American Opportunity Tax Credit.
• $2,100. The average benefit these families and students receive from the American Opportunity Tax Credit. The Romney-Ryan tax plan would eliminate this credit, leaving families in the state with no credit or a less valuable tuition credit.

All these tax hikes on low-income and middle-class families would come courtesy of the Romney-Ryan tax plan’s overarching emphasis on providing even more tax breaks to the top income earners in our country. Their plan would force middle-class families to pay more in taxes than they do today so that the richest among us pay less.

The bottom line for Virginians: The 6,784 millionaires in the state would see an additional tax cut of at least $87,000. The total costs for these tax cuts for all the citizens of the state would be at least $590 million.

Jobs would decline across Virginia

Gov. Romney famously argued that we should have “let Detroit go bankrupt,” never mind the consequences for workers. The Romney-Ryan plan takes the same approach to job creation, which would be devastating to our economy and the lives of tens of millions of Americans. The Romney-Ryan plan for job creation is so out of touch with what’s best for our country because it relies on the same top-down economics that created the worst job growth in decades under President George W. Bush.

Gov. Romney and Rep. Ryan claim they will create 12 million new jobs by the end of 2016, the end of their presumptive first term. In fact, their proposal would kill 360,000 jobs next year alone. Most telling, their plan includes even greater tax incentives for outsourcing that would actively undermine U.S. employment, leading to 800,000 more jobs being created in foreign countries.

Here’s what it would mean for Virginia.

Letting the auto industry go bankrupt

The auto industry is vital to the health of our economy. President Obama’s decision to save the U.S. auto industry prevented the immediate loss of over 1 million American jobs across the country.

And now the auto industry is roaring back. General Motors Co. is once again the largest automaker in the world. The industry in total has added over 236,000 jobs since June 2009.

In addition, another 17,000 jobs are projected to be created in Virginia specifically because of new fuel economy standards finalized last month. The Romney-Ryan campaign denounced the standards, which will save the average American family $8,000 once fully implemented, as “extreme.”

How clean energy helped power new jobs in the state

Gov. Romney and Rep. Ryan present a clear vision for America’s energy future. They want more lucrative tax breaks for Big Oil companies and their allies while slashing investments in clean energy technologies that create U.S. jobs and keep the United States competitive in the global marketplace.

Instead of investing in the growing clean energy economy and acknowledging the benefits of clean energy to Virginia’s economy and health of its residents, the Romney-Ryan clean energy plan is to attack the industry and undermine its growth, calling green jobs “illusory.”

There are more than 90,000 green jobs in Virginia according to the U.S. Bureau of Labor Statistics, and nationwide the sector employs more than 3 million Americans. Due to the strong winds on Virginia’s Atlantic coast, there is much potential for wind energy. In fact, Virginia is constructing the first offshore wind turbine in the United States. Virginia’s offshore wind potential combined with its onshore resource could provide 4.5 times the state’s current electricity needs.

The Romney-Ryan plan also calls for increased oil and gas drilling off the coasts of Virginia, Florida and North Carolina, a move that the Department of Defense is against. The Department of Defense wants to prohibit offshore drilling in a vast majority of the 2.9 million acre zone under consideration for oil production off Virginia. Drilling is an issue in the area because it is one of only two areas where the Navy can conduct large scale training exercises. About 20 percent, or 630,000 acres, would be open to drilling. Secretary of the Interior Ken Salazar has reiterated that Defense Department needs will take precedence over the energy industry. Offshore drilling also threatens the job and economic benefits the tourism industry provides Virginia.

Renewable electricity has nearly doubled under the Obama administration, and the clean energy economy grew by 8.3 percent from 2003 to 2010—almost double what the overall economy grew during those years—but Gov. Romney’s plan threatens the 90,000 green jobs in Virginia and risks the creation of thousands more in the years to come.

Drastic cuts to federal spending would shrink Virginia’s middle class

Gov. Romney and Rep. Ryan promise enormous cuts in overall federal spending, totaling more than $4 trillion over 10 years. At the same time, they have promised enormous amounts of new spending for the Pentagon—more money, in fact, than the Pentagon itself says it needs. They’ve also offered assurances that there will be no cuts to Medicare or Social Security for those over the age of 55, a promise at odds with their vow to repeal the Affordable Care Act, which improved Medicare benefits and lowered costs for current seniors. But taken together, these promises necessarily mean that the entire bulk of the Romney-Ryan spending cuts will necessarily fall on the remaining 40 percent of the budget. And unfortunately for states, nearly all of their federal funding can be found in that remaining 40 percent.

In 2010 Virginia received nearly $10.3 billion in federal aid. This money helped support Virginia’s schools, law enforcement efforts, highway repairs, and job-training programs. It helped put food on Virginia families’ tables and it helped provide health insurance to about one in every eight Virginians, including nearly 700,000 of Virginia’s children. But that funding would be dramatically curtailed under the proposed budget policies of Gov. Romney and Rep. Ryan. In fact, their budget plan would cost Virginia approximately $651 million in federal funding in 2013 alone, and the costs to Virginia would grow to almost $4 billion by 2016. (see Figure 1)

The simple math dictates that for the Romney-Ryan plan to achieve their spending goal, they will need to cut nearly all federal grants to the states by a staggering 40 percent by 2016. And that is in addition to the nearly 30 percent cut to Medicaid that would result from their plan to transform Medicaid into a block grant. Altogether, under the Romney-Ryan plan, Virginia stands to lose more than $46 billion in federal funding from 2013 through 2022, an average of more than $4.6 billion a year. (see Methodology)

Then there are the other federal programs that help low-income and middle-class families with their children’s education. The Romney-Ryan education plan, dubbed “A Chance for Every Child,” would eliminate federal requirements that low-performing schools take action to improve the education of their students, end the federal requirement that teachers obtain certification to teach, and privatize public education by turning federal funds for low-income and special-needs students into vouchers. Gov. Romney and Rep. Ryan would also sharply defund the Pell Grant for aspiring college students from poor families.

In Virginia the consequences would be devastating. Under the Romney-Ryan plan:

• The Head Start program for pre-Kindergarten children would be crippled. Under their plan, in 2013 alone Head Start in Virginia would lose $16 million, resulting in 2220 slots for children eliminated and 888 job losses. In 2014 those numbers jump to $38 million in cuts, resulting in 4,791 slots for children eliminated and 2,154 jobs lost.
• Special education funding would be slashed. Under their plan $45 million in cuts for special-education grants would result in the costs for 24,785 students’ special instruction being shifted to the states, jeopardizing their education and costing 644 jobs to be lost. But in 2014, these cuts become even more drastic with the cuts increasing to $103 million, resulting in 57,306 children at risk of no longer having their classes and 1,472 jobs being cut.
• Big cuts for colleges and aspiring students. The Romney-Ryan budget would so severely restrict Pell Grant eligibility that more than 1 million low- and middle-income students would no longer be able to count on them to help pay for college. Cuts to these grants would be devastating to the 192,144 Virginia students who depend upon them to further their education. The average Pell Grant to Virginia students under the Romney-Ryan plan would be cut by about $850 a year.

Gov. Romney gave his answer to student’s needing money earlier this year during an appearance at Otterbein University, when he advised cash-strapped students to “borrow money if you have to from your parents.” He followed up this recommendation by recounting a story about a friend who borrowed $20,000 from his parents, not an opportunity most young people have. If not realistic, this advice is not entirely surprising, given that Gov. Romney paid for college by selling stock options given to him by his CEO father.

Seniors in Virginia would lose health care benefits and pay more

Gov. Romney and Rep. Ryan plan to convert our nation’s Medicare program into a voucher system for people who are under 55 years of age. It is that simple. Their candidacy has become infamous for its startling determination to lie about President Obama’s plans for Medicare and the true nature of their own plan for the vital program. Under their plan, seniors beginning in 2023 would receive vouchers to purchase health insurance from either private insurance companies or from traditional Medicare. If premiums for traditional Medicare or the private plan they choose cost more than the voucher amount, then seniors would have to pay the difference themselves.

Gov. Romney and Rep. Ryan claim that no one over 55 will be affected by their plan to turn Medicare into a voucher. But that’s simply not true. The reason: Seniors across our country are already benefiting from changes to Medicare because of Obamacare.

In Virginia more than 559,753 seniors who rely on their Medicare benefits receive one or more preventive services—such as cancer screenings, diabetes testing, and bone density scans—free of charge through their Medicare plan. This is saving Virginia seniors money each year and also providing them with the care needed to protect their health.

What’s more, Gov. Romney and Rep. Ryan would open up the prescription drug donut hole that Obamacare is closing. Since the law was enacted, Virginia seniors have saved $101.5 million on prescription drug costs because Obamacare is closing the loophole. In 2012 alone, more than 43,025 Virginia seniors and people with disabilities saved $27.4 million. While they each have saved an average of $639 this year, Gov. Romney and Rep. Ryan would force them to once again pay for this out of pocket.

Because of the increased drug costs and higher Medicare premiums, the Romney-Ryan voucher plan would raise health care costs for current seniors by $11,000 for the average person who is 65 years old today. And it’s even worse for the future seniors. Because of cost shifting and increases in system-wide health care costs, Medicare costs for future seniors who become eligible for Medicare after 2022 will increase dramatically under the Romney-Ryan plan. Specifically, upon retirement:

• Today’s 54-year-old will have to pay increased Medicare costs of $59,450
• Today’s 49-year-old will have to pay $124,626 more
• Today’s 39-year-old will have to pay $216,631 more
• Today’s 29-year-old will have to pay $331,170 more

These estimates are conservative because we examined the least radical of the various Romney-Ryan proposals to calculate our estimates. Had we instead used the budget plan authored by Rep. Ryan for the House of Representatives in 2011, the nonpartisan Congressional Budget Office estimates it would result in increased costs that are much greater, forcing current seniors to pay $6,400 more per year for their health care costs.

Women in Virginia would pay more for health care but receive less bang for their buck

Make no mistake, whether we’re talking about women’s health or reproductive rights, Gov. Romney and Rep. Ryan want to take women backward. Women’s health has been under constant siege since Republicans overtook the House of Representatives and some additional state governments in the 2010 midterm elections.

Virginia Republicans have been extremely eager to take on women’s health. Earlier this year, Gov. Bob McDonnell and Republicans in the state legislature drew national attention for a bill that would have forced women to undergo costly, invasive trans-vaginal ultrasounds in order to obtain an abortion. Only after a local—and then national—outcry was the bill reworked so that an abdominal ultrasound is required instead of the invasive procedure. Virginia Republicans did pass a law, a so-called TRAP law (Targeted Regulation of Abortion Providers), that requires existing abortion care providers to meet new arduous building regulations designed to force the providers to close their doors. While a state medical board initially issued regulations grandfathering the state’s existing facilities, they later bowed to extreme pressure from Republican Attorney General Ken Cuccinelli and Gov. McDonnell to issue the extremely strict regulations.

Indeed, the Republican record includes the all-male U.S. congressional panel debating insurance coverage for contraception, 33 attempts to repeal the health reform law and all of its benefits for women, vaginal probes in Virginia and elsewhere, and efforts to defund Planned Parenthood clinics around the country, including in Virginia. Gov. Romney and Rep. Ryan even endorse the radical “personhood” measures that would outlaw abortion in all circumstances and could potentially ban common forms of birth control and in-vitro fertilization. Fortunately, Virginians are not at all that enamored with this position and forced Republicans to abandon their personhood legislation, at least until next year’s legislative session.

Yet Gov. Romney and Rep. Ryan want to launch a more broadly insidious campaign against women’s health. If elected president, Gov. Romney promises to repeal the Affordable Care Act “on day one” of his presidency. Why is Obamacare so important to women’s health? Due largely to the high cost of health insurance coverage—especially for women without access to employer-based coverage—19 million American women between the ages of 18 and 64 were uninsured in 2011—in 2010 it means 390,600 women in Virginia were uninsured.

Even if insured, women tend to have higher out-of-pocket costs than men. Women of reproductive age spend 68 percent more than men on health care expenses. And more than half of American women report delaying needed medical care because of cost, while one-third of women report giving up basic necessities such as food, heat, or rent to pay for health care expenses. In 2014 the health care law will prohibit insurance companies from their practice of routinely denying women coverage for gender-related pre-existing conditions such as breast cancer, a Cesarean section, domestic violence, or sexual assault. And Obamacare has already prohibited insurance companies from continuing to deny coverage to the 116,500 Virginia children who have a pre-existing condition.

Obamacare also makes health care more affordable by guaranteeing no-cost coverage for recommended preventive services such as mammograms, Pap smears, well-baby care, contraception, gestational diabetes screening, lactation supports, and much more. Approximately 47 million women will have access to women’s preventive services without cost-sharing under the Affordable Care Act, including nearly 1,376,205 women in Virginia.

Women without employer-based insurance coverage have it particularly hard in the so-called individual health insurance market, which discriminates against women in numerous ways and which Gov. Romney and Rep. Ryan want to maintain. Women are often charged much more for their health insurance coverage solely because of their gender, a practice known as gender rating. In fact, women currently pay $1 billion more than men each year in health insurance premiums in the individual market for the same benefit. Because Virginia law does not prohibit or limit insurers from charging women more, if Gov. Romney and Rep. Ryan succeed in repealing the health care law, women would once again face higher costs simply because of their gender.

Young adults in Virginia would lose access to their families’ health insurance

The Millennial generation of Americans born in the late 1970s and early 1980s also face staggering costs and loss of care from the Romney-Ryan plan for health care. Gov. Romney’s promise to dismantle Obamacare would result in 66,000 young adults in Virginia losing the access they have today to their families’ health insurance due to the Affordable Care Act. And because of the Romney-Ryan plan to turn Medicare into a voucher program, today’s average 29 year old will have to save $331,200 more to afford their health care upon retirement under the Romney-Ryan plan.

Conclusion

The 2012 presidential election offers two contrasting visions of how our country should work. President Obama and Vice President Biden seek to restore the shared prosperity that once defined the growth of our nation’s middle class while Gov. Romney and Rep. Ryan want to return to the trickle-down economic policies of the Bush era, which led inexorably to the Great Recession.

The contrast is clear. It’s no exaggeration to say the future growth and prosperity of Virginia’s middle class is at stake. The decision made in this election will determine the strength of the state’s middle class and the course our country takes not just over the next two or four years but for decades to come.

President Obama and Vice President Biden are clear in their plans to restore shared prosperity. Gov. Romney and Rep. Ryan are much less open about their policy intentions, yet as this brief demonstrates, what they have unveiled enables us to examine the consequences in telling detail. In Virginia and across our nation, low-income and middle-class Americans would sacrifice for the greater benefit of the wealthiest under the Romney-Ryan plan for the economy, taxes, and health care. In contrast, the Obama-Biden plan asks for shared sacrifice and shared prosperity that is necessary to grow our middle class and preserve our global economic competitiveness well into the 21st century.

Methodology

In order to estimate the effect of the spending plans of Republican presidential and vice presidential contenders Gov. Mitt Romney (R-MA) and Rep. Paul Ryan (R-WI) on federal funding for states, we begin by estimating the percentage cut in overall spending that would be required given their stated spending proposals. For federal spending they propose to:

• Cap all federal spending at 20 percent of gross domestic product
• Increase defense spending to 4 percent of gross domestic product
• Make no cuts to Medicare or Social Security in the next 10 years
• Repeal the Affordable Care Act, including the Medicare savings, which would increase Medicare spending by more than $700 billion
• Transform Medicaid into block grants to the states

In order to comply with the Romney-Ryan spending cap after accounting for the spend¬ing effects of the other policy proposals, the former Massachusetts governor and House Budget Committee chairman would need to cut all other federal spending—that is spending aside from Social Security, Medicare, Medicaid, defense, and net interest—by about 11 percent in 2013, growing to 63 percent by 2022, for an annual average of 39 percent over the next 10 years. These calculations rely on the following assumptions:

• The Romney-Ryan plan would reduce federal spending to fully comply with their proposed spending cap by the end of 2016.
• From 2013 through 2015 their plan would reduce overall federal spending to levels consistent with the House Republican budget plan, authored by Rep. Ryan.
• The Romney-Ryan plan to turn Medicaid into a block grant will be roughly consistent with Rep. Paul Ryan’s plan as detailed in his most recent budget plan.
• The baseline, against which the percentage cuts are calculated, includes a permanent fix to the Medicare Sustainable Growth Rate formula, a repeal of the “sequester” automatic spending cuts, and the drawdown of U.S. military forces in overseas combat operations.

In order to estimate how these cuts would specifically impact states, we started with U.S. Census Bureau data on federal aid to states in fiscal year 2010—the most recent year avail¬able. We then extrapolated fiscal year 2013 through 2022 funding by using the most recent Congressional Budget Office baseline estimates. For mandatory grants we used CBO’s spending growth projections specific to those particular programs. For discretionary grants we used the general growth projections for nondefense discretionary spending.

Since nearly all federal grants to states, with the notable exception of Medicaid, fall into the “other federal spending” category, we applied the annual percentage cut required to comply with the Romney-Ryan plan’s proposed cap to the baseline projections of all non-Medicaid grants. But since their plan has a separate policy for Medicaid, we did not apply the “across-the-board” percentage cut to that program. Instead, for Medicaid, we applied the annual percentage cut that would occur under the “block grant” proposal from Rep. Ryan that is broadly similar to Gov. Romney’s outlined proposal. This cut also includes the effect of repealing the Affordable Care Act.

SOURCE: AP/Bebeto Matthews

A coalition of New York City unions rally for a "March for the Middle Class" across the Brooklyn Bridge to City Hall in 2011. Union membership provides an income boost to middle-class families and is good for economic growth.

New Census Bureau data on state incomes released yesterday show just how important unions are to creating a strong middle class. An update to an analysis in our April 2011 report, “How Unions Make the Middle Class,” finds that a 10-percentage-point increase in the unionization rate would boost the average annual income for middle-class households—unionized or not—by $1,501 a year. Ensuring the United States has a strong middle class is critical, as the middle class is the engine of economic growth.

Unions strengthen the middle class by advocating for workers both in the workplace and in our democracy. Organized labor not only fights for higher wages and better benefits at work but it also makes democracy work for the middle class and advocates for policies that boost the middle class as a whole. As the new Census data make clear, stronger unions create a strong middle class not only at the national level but at the state level, as well.

In 2011, for example, the five states with the lowest unionization rates—North Carolina, South Carolina, Georgia, Arkansas, and Louisiana—all had middle classes with below-average strength, with strength defined as the share of income going to the middle 60 percent of households. Four out of the five states with the highest unionization rates—Alaska, Hawaii, Washington, and Michigan—all had middle classes with above-average strength.

The chart below shows the state-by-state impact of increasing unionization rates by 10 percentage points, returning them roughly to their 1980s levels. All middle-class households would feel the effects of this benefit, whether they have union members or not. These figures are based on a regression analysis that looks at how unionization rates affect the share of income going to the middle class, while taking into account other important factors such as education levels, unemployment, the income level of a state, and industry employment mix.

The boost from increased unionization is roughly equivalent to the $1,664-per-household boost from increasing college attainment rates by 10 percentage points. Improving educational outcomes and increasing access to higher education are correctly pointed out as important steps for bolstering the middle class, but, as our numbers show, we should not underestimate the importance of unions.

The American middle class has weakened over the past several decades and now receives the lowest share of income it ever has—45.7 percent—since the data were first collected in 1967. We can begin to rebuild our middle class, however, starting with these 35 policies. As our analysis shows, strengthening organized labor is one of the most important first steps.

David Madland is the Director of the American Worker Project at the Center for American Progress Action Fund. Nick Bunker is a Research Assistant with the Action Fund.

Endnotes and citations are available in the PDF version of this testimony.

Thank you for inviting me here today to discuss pension modernization for the 21st century.

My name is David Madland and I’m the Director of the American Worker Project at the Center for American Progress Action Fund.

I appreciate the opportunity to present my views on this important topic, a topic which I have been researching for some time. I wrote my dissertation about the decline of the private-sector defined-benefit pension system and have written extensively in academic and popular publications about retirement policy.

In my testimony I will address the three questions posed by this committee, which are focused on how to best improve the private retirement system, and leave discussion about Social Security for another time.

Social Security provides an essential baseline of income for retirees and must be strengthened to ensure that it continues to do so for generations to come, as the Center for American Progress has proposed. But Social Security was never intended to be people’s only source of income in retirement.

To maintain their standard of living in retirement, Americans depend upon accumulations in employer-sponsored retirement accounts—such as 401(k)s and pensions—and, to a smaller degree, private savings.

Unfortunately, the private retirement system is failing too many Americans, something that is becoming abundantly clear as the first generation of workers to depend primarily on 401(k) plans—rather than the increasingly rare defined-benefit pension—starts to retire.

The failures of the private retirement system could have troubling consequences. If we continue down the current path, many retirees will outlive their retirement savings, potentially saddling their children and the country with a burden that weighs down the economy and causes significant human suffering.

Defined-benefit pension plans have provided a secure retirement for millions of middle-class Americans, but it is clear that the traditional pension system is in decline and that existing defined-benefit pension models may not be well-suited for some of our 21st century workforces. What should our pension system look like to meet the challenges of the global economy and the need to provide retirement security for working Americans?

The pension system of the future should ensure all workers have a cost-effective and secure way to save so that Americans can maintain their standard of living in retirement and retire with dignity.

In designing a plan to meet these goals, I think it is essential to understand that all retirement plans involve tradeoffs between costs, risk, and retirement adequacy, and involve different choices about who bears these costs and risks—employers, employees, or taxpayers.

There is no getting around these tradeoffs—but there are better and worse ways to manage these tradeoffs.

Some retirement plans are simply better at managing these tradeoffs because of the way they are designed.

While 401(k)s, the dominant defined-contribution retirement plan in the current system, have worked well for some workers, in general they do not do a particularly good job at managing these tradeoffs.   401(k)s have relatively low risks and costs for employers, but for workers the costs and risks are quite high, such as excessive fees, the potential for significant loss of assets due to drops in the stock market, and the likelihood of outliving assets.

As a result, 401(k)s have proven unable to provide adequate retirement security for most workers.  Indeed, the typical near-retirement age worker with a 401(k) has only accumulated only enough money to provide a monthly payment of about $575 in retirement. To make matters worse, less than half of all workers even have a retirement plan at work, and that figure has been declining over the past few decades as 401(k)s have supplanted defined-benefit pensions.

To create the retirement system of the future, we should learn from these challenges. All workers should have access to a high-quality retirement plan that will help create a secure retirement.

The USA Retirement Funds plan that Sen. Tom Harkin (D-IA) proposed in his July report entitled “The Retirement Crisis and a Plan to Solve It” builds upon the lessons we have learned from the weaknesses of the current retirement system and is a good place to start building a modern retirement system because it manages the cost, risk, and adequacy tradeoffs quite well.

Indeed USA Retirement Funds share much in common with the new retirement plan proposal from the Center for American Progress, called collective defined contribution plans—details of which are being released today in a new issue brief.

Both the USA Retirement Funds and collective defined contribution plans are hybrid-type plans that combine elements of a traditional pension—such as regular payments in retirement, professional management, pooled investing, and risk sharing across generations—with elements of a 401(k)—such as predictable costs for employers and portability for workers.

This hybrid approach should be a core part of our future pension system because its features are less costly and less risky than a 401(k). Indeed, retirement plans that have the core features of these hybrid models—professional money management, long investment time horizons, and the ability to spread risks across multiple generations—are estimated to cost about half as much to provide an adequate retirement benefit, while exposing participants to much lower levels of risk than a 401(k).

In subsequent answers I will elaborate more on the advantages of these features and explain why they should be part of the retirement system of the future.

What would make it easier and attractive for businesses—especially small businesses—to provide their employees with a traditional pension benefit? Would reducing the employers’ risk and plan complexity help?

Reducing employers’ risk and plan complexity would make it easier and more attractive for businesses to provide their employees with a pension benefit.

Employers have been shifting away from traditional defined-benefit pension plans for a number of reasons, including plan complexity, regulatory changes, and reduced inflation, but a central factor in the shift has been the volatility of pension funding. Some employers have been willing to bear this volatility, but for most employers the risk that additional contributions may be required—especially during tough economic times when money is tight—has been a significant disincentive for employers to offer defined-benefit pensions. The unpredictable nature of pension contributions can cause problems for a company’s balance sheet.

Hybrid models, such as CAP’s collective defined contribution plan and Sen. Harkin’s USA Retirement Funds can reduce this volatility for employers. That is because to employers, these kinds of hybrid plans are defined-contribution plans, like a 401(k).

In these hybrid models the employer is not responsible for guaranteeing benefits, but rather is only responsible for making contributions—just like in a 401(k). Thus the employer would enjoy predictable contribution levels and minimal risk.

I think these hybrid models would be very attractive to employers. Employers would be able to provide a retirement plan that is more likely to lead to a secure retirement for their employees than a 401(k) without taking on the cost, risk, and complexity of a defined-benefit pension plan. In short, these kinds of hybrid plans allow employers to provide a good retirement plan to their workers without bearing the responsibilities of a defined pension plan.

What do employees need from a pension plan to ensure they will have a secure retirement?

As I mentioned before, retirement planning is a tradeoff between cost, risk, and adequacy. Workers need a retirement plan that does a good job managing these tradeoffs, meaning the plan is cost effective, minimizes risks, and has a very high likelihood of providing an adequate retirement benefit.

There are three core elements in retirement plan design that are particularly important in effectively managing the costs and risks of retirement: professional money management, long investment time horizons, and the ability to spread risks across multiple generations. Both Sen. Harkin’s USA Retirement Funds and CAP’s collective defined contribution plans include these features.

Let’s start with how these features reduce the cost of saving for retirement.

Professional money management of a pension fund leads to higher investment returns than most 401(k) participants achieve. Though fund managers have a hard time beating market averages, they typically do much better than individual investors—in large part by avoiding common investing pitfalls such as such as failing to diversify assets and pulling money out of stocks at the bottom of the market and thus missing the rally. Professional money managers would ensure retirement portfolios are properly diversified and invested for the long haul to achieve better returns than most individual investors are likely to achieve.

Similarly, pooling investment risks over a longer time period also boosts investment returns: Individuals in a 401(k) have to become more conservative with their investments as they age because they have less time to recover any possible losses, resulting in lower returns. But when accounts of both older and younger workers are pooled together, the fund manager can maintain a balanced portfolio that achieves higher returns. This effect, called intergenerational risk sharing, can substantially raise pension returns.

Finally, pooling longevity risk across all retirees in the plan means that the plan needs only to accumulate sufficient funds to pay for the average retiree’s lifespan in the plan. In contrast, an individual with a 401(k) has to save an amount sufficient for their maximum life expectancy: Saving only enough for the average lifespan could leave retirees without sufficient income in their later years.

These advantages mean that a retirement plan with these features would cost an estimated 46 percent less than a 401(k) to provide the same level of retirement benefit, according to research by the National Institute on Retirement Security. To put this percent savings in dollar terms: A worker earning $50,000 before retirement would need to contribute an estimated $5,200 less in the year before retirement and thousands less in each of the other 29 working years they made retirement contributions to save enough for a secure retirement with a collective defined contribution plan compared to a 401(k).

These features also help reduce the risk of saving for retirement when compared to a 401(k).

A long investment horizon helps mitigate the risk that the market performs poorly while a worker is saving for retirement. While an individual career may seem like a long time horizon for retirement investing, the chance that the market will perform poorly during the time when a worker is most aggressively invested in the market is still quite great compared to the longer timeframe that the intergenerational pooling of the CDC allows. A shorter timeframe increases the chance an individual will experience a period of low growth. For example, the lowest average annual return on the Dow Jones Industrial Average over a 75-year period was 3.05 percent compared to a low of -0.04 percent annual return for investments over a period of 30 years.

Further, the risk that an individual in a 401(k) is hurt by a big drop in the market is much greater than the risk borne by participants in a collective defined contribution plan. That is because investment timing risk can be particularly acute for an individual but is less critical for a pooled investment fund.

Between December 2007 and June 2009 (the duration of the Great Recession), for example, workers who were near retirement, aged 55 to 64, and had a 401(k) for 20 to 29 years, saw their account balance decrease by 17.4 percent on average—and though account balances have recovered slightly since then, they are still down significantly. In contrast, estimates suggest that because of investment losses suffered during the Great Recession, hybrid pensions in the Netherlands—where the hybrid model is common—may need to be reduced by much less.

In short, hybrid models with professional money management, long investment time horizons, and the ability to spread risks across multiple generations are a good way to manage the tradeoffs inherent in retirement planning because they reduce costs and risks and make a secure retirement more likely.

The pension system of the future should include a hybrid model to ensure all workers have a cost-effective and secure way to save so that Americans can maintain their standard of living in retirement and retire with dignity.

David Madland is the Director of the American Worker Project at the Center for American Progress Action Fund.

SOURCE: AP/Charles Dharapak

Republican presidential candidate and former Massachusetts Gov. Mitt Romney speaks to reporters in Costa Mesa, California, Monday, September 17, 2012.

Gov. Mitt Romney’s secretly recorded comments regarding the 47 percent of Americans who don’t pay federal income tax have garnered a wide variety of reactions from across the country.  Many are upset with his allegation that such people have a sense of entitlement or that they view themselves as victims. Some point out that the statistic is grossly misleading because it excludes payroll taxes and that low- and middle-income families often pay state and local taxes at a higher percentage rate of income than wealthier families. Others, such as Rep. Allen West (R-FL), say the statistic is proof we are “moving toward economic dependence instead of economic freedom.”

But what surprises me the most about the comments is what they seem to say about the former Massachusetts governor’s understanding of his own base and the people he must depend on to win his race for president:

There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what. …

Our message of low taxes doesn’t connect … so my job is not to worry about those people. I’ll never convince them that they should take personal responsibility and care for their lives. What I have to do is convince the five to 10 percent in the center that are independents, that are thoughtful.

If one simply looks at the Electoral College, the states upon which Gov. Romney is attempting to build an electoral majority are not more affluent than the states likely to support President Obama. In fact the numbers are quite the contrary. If Gov. Romney is to build upon the states won by Sen. John McCain four years ago, he will begin with a base of 22 states, of which, according to the Census Bureau, 17 have median family incomes below the national average.

During the 2010–2011 period, the average median income of the 22 McCain states was less than $47,000, or about 7 percent below the national average. States carried by then-Sen. Obama of Illinois in 2008 had an average median income of more than $54,000. Altogether the states carried by Sen. Obama had median incomes about 16 percent higher than those carried by Sen. McCain. In short, blue states are more prosperous than red ones.

The blue states also pay a lot more taxes. According to the Tax Foundation, the 29 states (plus the District of Columbia) that went for Democratic Party contender Obama in 2008 accounted for more than three-quarters of all of the federal revenue collected in 2005, the last year for which the foundation has state-by-state data. Nine of the 10 states with the highest per capita federal tax payments voted for him. Nine of the 10 states with the lowest per capita federal tax payments voted for Sen. McCain. The average per capita federal tax payments in the McCain states was a little less than $5,500 whereas the average in the Obama states was nearly $7,700, about 40 percent more.

In terms of entitlement, states that rely most heavily on federal dollars and perhaps feel, in Gov. Romney’s words, the federal government “has a responsibility to care for them” largely lined up for Sen. McCain as a group. In fact, excluding the District of Columbia, the only Obama state that made the top 10 in per capita federal payments was Virginia. The other nine were all McCain states. And of the 22 states carried by Sen. McCain, 18 were in the top half of states in per capita federal spending.

But most states cover a lot of territory and hold a lot of people. Maybe if we break states down in smaller pieces, Gov. Romney’s video comments will be less counterfactual. So let’s look at Virginia—a state that the Romney campaign is pouring millions into each week to try to win it back into the red column.

Barack Obama was the first Democratic presidential nominee to carry Virginia in 44 years. He won less than a third of the counties in the state. If you exclude the six counties of Northern Virginia, he lost the state by 90,000 votes. But he won Northern Virginia with 60 percent of the vote, and won the state by 232,000 votes. Sen. McCain’s strongest support came from Southwest Virginia, where 13 relatively small counties gave him a little more than 64 percent of the vote and a margin of 41,000.

While Northern Virginia and Southwest Virginia are at opposite ends of the spectrum politically, they are also at opposite ends in terms of economic well-being. But the correlation between economic well-being and political allegiance is the exact opposite of the correlation Gov. Romney made in his secretly recorded tape.

The county that gave President Obama the highest proportion of its votes in 2008 was Arlington County in northern Virginia, where he racked up nearly 73 percent of the votes cast for either of the two major party candidates. The county that gave him the lowest percentage was Scott County (in the rural southwest where Virginia bumps up against Tennessee, Kentucky, and western North Carolina) where he got only 29 percent of the vote.

U.S. Census data indicate that more than a quarter of the 92,000 households in Arlington had incomes over $150,000 while less than 1 percent of Scott County households had incomes over that level. Only 22 percent of Arlington households had incomes under $50,000 while 67 percent of Scott County households had incomes below that level.

Median household income in Arlington was a little less than $95,000 or about 88 percent higher than the national average. Scott County median income was a little more than $34,000, or about 32 percent below the national average. Arlington’s median was a little below that of most jurisdictions in Northern Virginia where President Obama got his winning margin. It was $4,000 higher than Prince William but $10,000 below Fairfax County and $20,000 below Loudoun County medians.

Median household income in Scott County was higher than many counties in Southwest Virginia—about $5,000 above nearby Dickenson and Buchannan but lower than the median income in next-door Washington County.

There was an even more dramatic difference between these two counties in their reliance on federal government support payments. Scott County has a higher percentage of elderly than Arlington and as a result more people receiving old-age and survivors’ insurance under Social Security. Counting retired workers, their wives, children, and surviving spouses, 21 percent of Scott County residents are receiving old-age and survivors’ benefits. The difference is even more dramatic with respect to Social Security Disability Insurance, which is being granted to 7.7 percent of the population of Scott County but only 0.7 percent of Arlingtonians.

Nearly everyone eligible for Social Security (either old-age, survivors, or disability) is also eligible for Medicare. So it might be expected that Scott County residents are significantly more reliant on Medicare as well.

Supplemental Security Income for disabled citizens unable to subsist on their Social Security benefits is another program that citizens in Scott County rely on much more than citizens in Arlington or other parts of Northern Virginia. Despite the fact that Arlington has a population more than 8.5 times larger than Scott County, it has fewer citizens that qualify for Supplemental Security Income based on disability than Scott County.

There is also a major difference in the degree to which citizens in the two counties rely on the Supplemental Nutrition Assistance Program. A total of 14 percent of Scott County residents turn to the program for food assistance, and only 2 percent of Arlingtonians use it.

Scott is not an outlier in is utilization of either of these two programs relative to its neighbors in Southwest Virginia. In fact, in neighboring Lee County the utilization rate for Supplemental Security Income is 35 percent higher than Scott County, and for supplemental nutrition assistance it is 50 percent higher.

When Southwest Virginia as a whole is compared to Northern Virginia as a whole, it has about 9 times as many nonelderly Supplemental Security Income beneficiaries per capita and about 5 times as many supplemental nutrition assistance beneficiaries per capita.

To an extent, numbers document how difficult life can be for many in this part of Virginia but they really don’t do the story justice. A former insurance executive named Wendell Potter who grew up in Tennessee, not far from this area of Virginia, wrote about attending the annual health fare in Wise, Virginia, one of the 13 Southwest Virginia counties we are talking about. He describes his feelings as he walked through the Wise County Fairgrounds where the “Remote Area Medical Health Expedition” took place:

Surreal. I felt as if I’d stepped into a movie set or a war zone. Hundreds of people … were waiting in lines that stretched out of view. … I noticed some of those lines led to barns and cinder-block buildings with row after row of animal stalls, where doctors and nurses were treating patients.

The medical health fair treated hundreds. Skin cancers were cut from people. Complex tests normally administered in hospitals were done on the dusty fairgrounds. Hundreds were treated but hundreds more had to be turned away due to lack of capacity. Potter concluded:

As I took in the scene at the Wise County Fairgrounds, I realized that the folks in those lines and animals stalls could have been my relatives or my parents’ neighbors. … I could tell from their faces that they were people with whom I shared cultural roots, but who—for whatever reason—simply hadn’t had the good fortune to land a high-paying job and a cushy office in a Philadelphia skyscraper.

Southwest Virginia is not unique. In 2008 many of these counties were among the 22 percent of U.S. counties that voted more Republican in a Democratic year than they had voted four years earlier in a Republican year. Combined, these counties cast 4,000 more Republican votes in 2008 than they cast in 2004, increasing the Republican percentage from 61 percent to 64 percent.

They appear to have a lot in common with the other counties that moved more heavily into the Republican column. On a map these counties have a distinct pattern starting in Southwest Pennsylvania, moving down the center of the Appalachian highlands through West Virginia and Kentucky, and then turning west through Kentucky and Tennessee through Arkansas and Oklahoma, reaching down into Northern Alabama, Louisiana, and Texas.

This map is not dissimilar to one published last year by the National Center for Health Statistics of the counties in the United States that have seen life expectancy decline, and that map is not dissimilar to others that show areas of our country with elevated levels of diabetes and heart disease. So it seems Gov. Romney is a much bigger beneficiary of the political support of the 47 percent he has chosen to attack at his fundraisers than he appears to realize.

In light of that, my suggestion to him is that, contrary to the strategy he laid out at the fundraiser, he should “worry about those people.” In fact, I would think he should worry a great deal about those people, about why they support his candidacy and what he can do to keep them from defecting.

Scott Lilly is a Senior Fellow at the Center for American Progress Action Fund.

SOURCE: AP/ Jae C. Hong

Gov. Mitt Romney, right, stands next to the Benjamin Franklin National Memorial as he speaks at a Tax Day Tea Summit held at the Franklin Institute in Philadelphia

View infographic: “The Real Cost of the Romney-Ryan Plan to Pennsylvanians.”

Endnotes and citations are available in the PDF version of this issue brief.

Behind dramatically different economic visions and a deluge of attack ads, this election comes down to numbers. Many Pennsylvanians—and many families across the United States—are asking what this will mean at the kitchen table. What will be the cost of a second term of President Barack Obama and Vice President Joe Biden or a first term led by former Massachusetts Gov. Mitt Romney and his running mate, Rep. Paul Ryan (R-WI)? The answer is that, in concrete and quantifiable ways, a Romney-Ryan presidency would mean higher taxes for the middle class, out-of-pocket health expenses for current seniors, fewer college loans and fewer health care options for young people, and the re-introduction of corporate outsourcing tax loopholes that have sent so many jobs overseas.

The nonprofit organizations Keystone Progress and the Center for American Progress Action Fund examined the economic and tax agenda of Gov. Romney and Rep. Ryan, taking a close look at how their policies would affect the way Pennsylvanians live and work. The price tag includes:

• Middle-class Pennsylvanians would pay more in taxes while millionaires pay less. Millionaires in the state would receive an additional $87,000 in tax breaks under the tax plans of Gov. Romney and Rep. Ryan while middle-class families would pay up to $2,000 more in health care taxes and have to pay $1,066 more because of reductions in the mortgage interest deductions.
• Jobs would decline across Pennsylvanians. Gov. Romney and Rep. Ryan plan to provide extra tax incentives for corporations to outsource jobs and are pushing policy proposals to cripple the clean energy industry, jeopardizing 180,000 jobs across the state.
• Drastic cuts to federal spending would shrink Pennsylvania’s middle class. The state stands to lose more than $118 billion in federal funding from 2013 through 2022, an average of $11.8 billion a year, from cuts to schools, law enforcement, highway repairs, job-training programs and more. These cuts would fall predominantly on middle-class and low-income families, especially the cuts to education programs and job training that would result in more than $1.3 billion in reduced support for the state in 2013 and 2014.
• Seniors in Pennsylvania would lose health care benefits and pay more. Gov. Romney and Rep. Ryan would force seniors in the state to pay at least $660 more for their prescription drugs each year. At the same time, the Romney-Ryan plan to turn Medicare into a voucher would cost current seniors at least $11,000 more out of pocket.
• Women in Pennsylvania would pay more for health care but receive less bang for their buck. Gov. Romney and Rep. Ryan would once again allow insurance companies to charge women more than men while taking away preventive care from at least 2.1 million women in the state.
• Young adults in Pennsylvania would lose access to their families’ health insurance. Gov. Romney and Rep. Ryan promise to dismantle Obamacare, which would directly result in 91,000 young adults in Pennsylvania losing the insurance they have today due to the Affordable Care Act.

The Romney-Ryan plan asks the vast majority of Americans to pay more, and then spends this revenue not on balancing the budget but rather on more tax breaks for the richest Americans. Gov. Romney’s top direct donor would receive over $2 billion in direct tax benefits from under the Romney-Ryan plan, while a typical police officer in Harrisburg makes almost $58,000 a year would see their taxes increase by $1,360. These lopsided priorities are not a coincidence or a cruel joke. They are the logical extension of a trickle-down economic policy that failed under President George W. Bush but would be revived by Gov. Romney and Rep. Ryan.

President Obama and Vice President Biden, in contrast, believe that economic growth comes from a strong middle class, rather than being passed down from the wealthiest. They have passed and seek greater investments in education, job-training, infrastructure development, and scientific research and development to boost our nation’s long-term economic competiveness, coupled with targeted cuts in government spending and the end of the Bush-era tax cuts for the wealthiest Americans to bring the federal budget deficit under control.

The Republican contenders for the White House have tried to avoid details, but have nonetheless gone on the record with proposals that have enormous consequences for the economy, taxes, women’s health, health care, and energy security. Keystone Progress and Center for American Progress Action Fund believe facts should matter in elections because they will certainly matter to families trying to live the American Dream. This report outlines the real cost of Romney-Ryan policies to Pennsylvanians.

It is tempting for people across Pennsylvania to start tuning out the election, defined too often by gaffes and thirty-second sound bites. But behind the politics are deep policy differences with profound consequences for the middle class.

Middle-class Pennsylvanians pay more in taxes while millionaires pay less

The linchpin of the economic strategy championed by Gov. Romney and Rep. Ryan is to further enrich the wealthiest by doubling down on conservative, top-down tax policies. Those tax policies—even more top heavy than those implemented by President George W. Bush, which led to the weakest job creation in the post-war era despite giving the richest Americans massive tax cuts—would further fuel the single biggest factor driving up our national debt. Gov. Romney proposes approximately $5 trillion in new tax cuts on top of the cost of extending all of the Bush-era tax cuts.

But instead of learning the lessons from past failed policies, Gov. Romney’s plan is to provide the wealthiest individuals and corporations with additional tax breaks, while asking the middle class, seniors, and students to pay even more. In contrast, Pennsylvania’s economy is rebounding due in part to President Obama’s 2009 economic stimulus package and his rescue of the auto industry. Pennsylvania’s unemployment rate in July stood at 7.9 percent—not nearly good enough—but down from a high in February 2010 of 8.7 percent.

Here’s how the Romney-Ryan tax plan would affect Pennsylvanians.

Raising taxes on middle-class Pennsylvania families

The tax plan of the two Republican candidates gives massive tax cuts to the richest Americans and corporations while purporting to collect the same amount of revenue as our current tax policies. The only way his plan adds up is by raising taxes on middle-class families in Pennsylvania and throughout the country. The nonpartisan Tax Policy Center found that Gov. Romney’s tax plan would require raising taxes on middle-class families with children who have incomes under $200,000 by an average of $2,000 per family. It would raise the average tax bill for all middle-class taxpayers by $500.

Their tax plan would raise taxes on low-income and middle-class families by forcing deep cuts in tax benefits such as the child tax credit, the mortgage interest deduction, the exemption for employer-provided health benefits, and the deduction for state and local taxes. Though Gov. Romney and Rep. Ryan repeatedly refuse to say which specific tax breaks they would eliminate or reduce, the Tax Policy Center calculates that these major tax benefits for middle-class families would have to be reduced by 58 percent to pay for his tax cut for the rich. That 58 percent cut does not even account for the fact that middle-class taxpayers would be forced to pay for the $1.1 trillion corporate tax cut also championed by the Republican ticket.

Here is how this hidden part of the Romney-Ryan tax plan would affect low-income and middle-class families in Pennsylvania:

• 6.7 million. The number of families in the state that rely on health insurance from their employer, which is currently not taxed.
• $1,200–$2,000. The amount those middle-class families would pay in higher taxes if the exemption for employer health insurance is reduced by 58 percent.

• 1.4 million. The number of middle-class families in the state that file for the mortgage interest deduction on their federal taxes.
• $1,066. The average loss in mortgage interest deduction for middle-class families in the state if the deduction is cut by 58 percent

• 1.7 million. The number of middle-class families in the state that deduct state and local taxes from their federal income taxes.
• $670. The amount on average that middle class families in the state will pay in higher taxes if the deduction for state and local taxes is cut by 58 percent.

• 936,000. The number of middle-class families in the state that benefit from the child tax credit.
• $580. The amount that families in the state will pay in higher taxes per child if the child tax credit is reduced by 58 percent.

• 209,000. The number of low-income and middle-class families in the state that claim the child care tax credit (in addition to the child tax credit detailed above).
• $318. The amount that families in the state will pay in higher taxes per child if the child care tax credit (in addition to the child tax credit detailed above) is reduced by 58 percent.

• 1.6 million. The number of low-income working families in the state that qualify for the earned income tax credit and the refundable portion of the child tax credit.
• $822. The tax increase per family that 388,000 of those families (with a total of 773,000 children) would pay on average if the improvements to those tax credits passed under President Obama are rolled back, as the Romney-Ryan plan proposes.

• 372,000. The number of middle-class Pennsylvania families and students paying for college educations that use President Obama’s American Opportunity Tax Credit.
• $2,300. The average benefit these families and students receive from the American Opportunity Tax Credit. The Romney-Ryan tax plan would eliminate this credit, leaving families in the state with no credit or a less valuable tuition credit.

All these tax hikes on low-income and middle-class families would come courtesy of the Romney-Ryan tax plan’s overarching emphasis on providing even more tax breaks to the top income earners in our country. Their plan would force middle-class families to pay more in taxes than they do today so that the richest among us pay less.

The bottom line for Pennsylvanians: The 9,545 millionaires in the state would see an additional tax cut of at least $87,000. The total costs for these tax cuts for all the citizens of the state would be at least $830 million.

Jobs would decline across Pennsylvania

Gov. Romney famously argued that we should have “let Detroit go bankrupt,” never mind the consequences for workers. The Romney-Ryan plan takes the same approach to job creation, which would be devastating to our economy and the lives of tens of millions of Americans. The Romney-Ryan plan for job creation is so out of touch with what’s best for our country because it relies on the same top-down economics that created the worst job growth in decades under President George W. Bush.

Gov. Romney and Rep. Ryan claim they will create 12 million new jobs by the end of 2016, the end of their presumptive first term. In fact, their proposal would kill 360,000 jobs next year alone. Most telling, their plan includes even greater tax incentives for outsourcing that would actively undermine U.S. employment, leading to 800,000 more jobs being created in foreign countries.

Here’s what it would mean for Pennsylvania.

Letting the auto industry go bankrupt

The auto industry is vital to the Keystone State and the steel industry. President Obama’s decision to save the U.S. auto industry prevented the immediate loss of more than 1 million American jobs across the country and nearly 34,000 in Pennsylvania.

And now the auto industry is roaring back. General Motors Co. is once again the largest automaker in the world. The industry in total has added over 236,000 jobs since June 2009.

In addition, another 21,000 jobs are projected to be created in Pennsylvania specifically because of new fuel economy standards finalized last month. The Romney-Ryan campaign denounced the standards, which will save the average American family $8,000 once fully implemented, as “extreme.”

How clean energy helped power new jobs in the state

Gov. Romney and Rep. Ryan present a clear vision for America’s energy future. They want more lucrative tax breaks for Big Oil companies and their allies while slashing investments in clean energy technologies that create U.S. jobs and keep the United States competitive in the global marketplace.

Instead of investing in the growing clean energy economy and acknowledging the benefits of clean energy to Pennsylvania’s economy and health of its residents, the Romney-Ryan clean energy plan is to attack the industry and undermine its growth, calling green jobs “illusory,” and opposing key wind tax credits that support thousands of jobs in Pennsylvania.

According to the Pennsylvania’s Alternative Energy Portfolio Standard, 18 percent of the energy it produces in 2020 will come from renewable and alternative energies. And though Pennsylvania has one of the nation’s largest coal mining industries, it has also heavily invested in renewable energy. In 2007 Montgomery County became the nation’s first wind-powered county. Contrary to Gov. Romney’s claims, Pennsylvania is situated to receive significant economic, job, and public health gains by increasing its own renewable energy resources.

There are more than 180,000 green jobs in Pennsylvania, according to the U.S. Bureau of Labor Statistics, and nationwide the sector employs more than 3 million Americans. The wind industry in Pennsylvania supports 3,000 to 4,000 direct and indirect jobs, and the state ranks 15th nationally in total wind capacity installed according to the American Wind Energy Association.

Wind is not the only clean energy source helping Pennsylvania’s economy. The Pennsylvania Energy Development Authority has invested upward of $10 million each year since 2004 in clean energy projects. Pennsylvania ranks as one of the top 15 states for installed solar capacity and is currently producing enough solar energy to power more than 10,000 homes.

Renewable electricity has nearly doubled under the Obama administration, and the clean energy economy grew by 8.3 percent from 2003-2010, almost double of what the overall economy grew during those years, but Gov. Romney’s plan threatens the 180,000 clean energy jobs in Pennsylvania and risks the creation of thousands more in the years to come.

Drastic cuts to federal spending would shrink Pennsylvania’s middle class

Gov. Romney and Rep. Ryan promise enormous cuts in overall federal spending, totaling more than $4 trillion over 10 years. At the same time, they have promised enormous amounts of new spending for the Pentagon—more money, in fact, than the Pentagon itself says it needs. They’ve also offered assurances that there will be no cuts to Medicare or Social Security for those over the age of 55, a promise at odds with their vow to repeal the Affordable Care Act, which improved Medicare benefits and lowered costs for current seniors. But taken together, these promises necessarily mean that the entire bulk of the Romney-Ryan spending cuts will necessarily fall on the remaining 40 percent of the budget. And unfortunately for states, nearly all of their federal funding can be found in that remaining 40 percent.

In 2010 Pennsylvania received more than $25 billion in federal aid. This money helped support Pennsylvania’s schools, law enforcement efforts, highway repairs, and job-training programs. It helped put food on Pennsylvania families’ tables and it helped provide health insurance to almost one in every five Pennsylvanians, including more than 1.2 million of Pennsylvania’s children. But that funding would be dramatically curtailed under the proposed budget policies of Gov. Romney and Rep. Ryan. In fact, their budget plan would cost Pennsylvania approximately $1.4 billion in federal funding in 2013 alone, and the costs to Pennsylvania would grow to more than $10 billion annually by 2016. (see Figure 1)

The simple math dictates that for the Romney-Ryan plan to achieve their spending goal, they will need to cut nearly all federal grants to the states by a staggering 40 percent by 2016. And that is in addition to the nearly 30 percent cut to Medicaid that would result from their plan to transform Medicaid into a block grant. Altogether, under the Romney-Ryan plan, Pennsylvania stands to lose more than $118 billion in federal funding from 2013 through 2022, an average of more than $11 billion a year. (see methodology on page 12)

Then there are the other federal programs that help low-income and middle-class families with their children’s education. The Romney-Ryan education plan, dubbed “A Chance for Every Child,” would eliminate federal requirements that low-performing schools take action to improve the education of their students, end the federal requirement that teachers obtain certification to teach, and privatize public education by turning federal funds for low-income and special-needs students into vouchers. Gov. Romney and Rep. Ryan would also sharply defund the Pell Grant for aspiring college students from poor families.

In Pennsylvania the consequences would be devastating. Under the Romney-Ryan plan:

• The Head Start program for pre-Kindergarten children would be crippled. Under their plan, in 2013 alone Head Start in Pennsylvania would lose $36 million, resulting in 5,802 slots for children eliminated and 1,903 job losses. In 2014 those numbers jump to $84 million in cuts, resulting in 11,949 slots for children eliminated and 4,455 jobs lost.
• Special education funding would be slashed. Under their plan $77 million in cuts for special-education grants would result in the costs for 51,488 students shifting to the state and jeopardizing their special instruction, and the loss of 864 jobs in 2013 alone. But in 2014 these cuts become even more drastic with the cuts increasing to $177 million, resulting in 118,319 children at risk of no longer having their classes and 1,964 jobs being cut.
• Big cuts for colleges and aspiring students. The Romney-Ryan budget would so severely restrict Pell Grant eligibility that more than 1 million low- and middle-income students would no longer be able to count on them to help pay for college. Cuts to these grants would be devastating to the 294,506 Pennsylvania students who depend upon them to further their education. The average Pell Grant to Pennsylvania students under the Romney-Ryan plan would be cut by about $830 a year.

Gov. Romney gave his answer to student’s needing money earlier this year during an appearance at Otterbein University, when he advised cash-strapped students to “borrow money if you have to from your parents.” He followed up this recommendation by recounting a story about a friend who borrowed $20,000 from his parents, not an opportunity most young people have. If not realistic, this advice is not entirely surprising, given that Gov. Romney paid for college by selling stock options given to him by his CEO father.

Seniors in Pennsylvania would lose health care benefits and pay more

Gov. Romney and Rep. Ryan plan to convert our nation’s Medicare program into a voucher system for people who are under 55 years of age. It is that simple. Their candidacy has become infamous for its startling determination to lie about President Obama’s plans for Medicare and the true nature of their own plan for the vital program. Under their plan, seniors beginning in 2023 would receive vouchers to purchase health insurance from either private insurance companies or from traditional Medicare. If premiums for traditional Medicare or the private plan they choose cost more than the voucher amount, then seniors would have to pay the difference themselves.

Gov. Romney and Rep. Ryan claim that no one over 55 will be affected by their plan to turn Medicare into a voucher. But that’s simply not true. The reason: Seniors across our country are already benefiting from changes to Medicare because of Obamacare.

In Pennsylvania 715,484 seniors who rely on their Medicare benefits received one or more preventive services—such as cancer screenings, diabetes testing, and bone density scans—free of charge through their Medicare plan. This is saving Pennsylvania seniors money each year and also providing them with the care needed to protect their health.

What’s more, Gov. Romney and Rep. Ryan would open up the prescription drug donut hole that Obamacare is closing. Since the law was enacted, Pennsylvania seniors have saved $283.6 million on prescription drug costs because Obamacare is closing the loophole. In 2012 alone more than 91,000 Pennsylvania seniors and people with disabilities saved $59.0 million. While they each have saved an average of $664 this year, Gov. Romney and Rep. Ryan would force them to once again pay for this out of pocket.

Because of the increased drug costs and higher Medicare premiums, the Romney-Ryan voucher plan would raise health care costs for current seniors by $11,000 for the average person who is 65 years old today. And it’s even worse for the future seniors. Because of cost shifting and increases in system wide health care costs, Medicare costs for future seniors who become eligible for Medicare after 2022 will increase dramatically under the Romney-Ryan plan. Specifically, upon retirement:

• Today’s 54 year old will have to pay increased Medicare costs of $59,450
• Today’s 49 year old will have to pay $124,626 more
• Today’s 39 year old will have to pay $216,631 more
• Today’s 29 year old will have to save $331,170 more

These estimates are conservative because we examined the least radical of the various Romney-Ryan proposals to calculate our estimates. Had we instead used the budget plan authored by Rep. Ryan for the House of Representatives in 2011, the nonpartisan Congressional Budget Office estimates it would result in increased costs that are much greater, forcing current seniors to pay $6,400 more per year for their health care costs.

Women in Pennsylvania would pay more for health care but receive less bang for their buck

Make no mistake, whether we’re talking about women’s health or reproductive rights, Gov. Romney and Rep. Ryan want to take women backward. Women’s health has been under constant siege since Republicans overtook the House of Representatives and some additional state governments in the 2010 midterm elections.

Pennsylvania Republicans have been eager to take on women’s health. Earlier this year the state legislature considered one of the most far-reaching anti-abortion bills in the nation. Among the many new restrictions on women seeking an abortion, it would force them to undergo a mandatory ultrasound regardless of medical need. Gov. Tom Corbett (R), a prominent supporter of Gov. Romney, famously said that women could simply “close [their] eyes” during the procedure if they objected. And in the wake of comments about “legitimate rape” made by Rep. Todd Akin (R-MO), Tom Smith, the Republican nominee for the U.S. Senate, made inflammatory comments likening a pregnancy as a result of rape to nothing more than an out of wedlock birth.

Indeed, the Republican record includes the all-male U.S. congressional panel debating insurance coverage for contraception, 33 attempts to repeal the health reform law and all of its benefits for women, vaginal probes in Virginia and elsewhere, and efforts to defund Planned Parenthood clinics around the country, including in Pennsylvania. Gov. Romney and Rep. Ryan even endorse the radical “personhood” measures that would outlaw abortion in all circumstances and could potentially ban common forms of birth control and in-vitro fertilization.

Yet Gov. Romney and Rep. Ryan want to launch a more broadly insidious campaign against women’s health. If elected president, Gov. Romney promises to repeal the Affordable Care Act “on day one” of his presidency. Why is Obamacare so important to women’s health? Due largely to the high cost of health insurance coverage—especially for women without access to employer-based coverage—19 million American women between the ages of 18 and 64 were uninsured in 2011, including 507,700 Pennsylvania women.

Even if insured, women tend to have higher out-of-pocket costs than men. Women of reproductive age spend 68 percent more than men on health care expenses. And more than half of American women report delaying needed medical care because of cost, while one-third of women report giving up basic necessities such as food, heat, or rent to pay for health care expenses. In 2014 the health care law will prohibit insurance companies from their practice of routinely denying women coverage for gender-related pre-existing conditions such as breast cancer, a Cesarean section, domestic violence, or sexual assault. And Obamacare has already prohibited insurance companies from continuing to deny coverage to the 191,100 Pennsylvania children who have a pre-existing condition.

Obamacare also makes health care more affordable by guaranteeing no-cost coverage for recommended preventive services such as mammograms, Pap smears, well-baby care, contraception, gestational diabetes screening, lactation supports, and much more. Approximately 47 million women will have access to women’s preventive services without cost-sharing under the Affordable Care Act, including 2.1 million women in Pennsylvania.

Women without employer-based insurance coverage have it particularly hard in the so-called individual health insurance market, which discriminates against women in numerous ways and which Gov. Romney and Rep. Ryan want to maintain. Women are often charged much more for their health insurance coverage solely because of their gender, a practice known as gender rating. In fact, women currently pay $1 billion more than men each year in health insurance premiums in the individual market for the same benefit. Because Pennsylvania law does not prohibit or limit insurers from charging women more, if Gov. Romney and Rep. Ryan succeed in repealing the health care law, women would once again face higher costs simply because of their gender.

Young adults in Pennsylvania would lose access to their families’ health insurance

The Millennial generation of Americans born in the late 1970s and early 1980s also face staggering costs and loss of care from the Romney-Ryan plan for health care. Gov. Romney’s promise to dismantle Obamacare would result in 91,000 young adults in Pennsylvania losing the access they have today to their families’ health insurance due to the Affordable Care Act. And because of the Romney-Ryan plan to turn Medicare into a voucher program, today’s average 29 year old will have to save $331,200 more to afford their health care upon retirement under the Romney-Ryan plan.

Conclusion

The 2012 presidential election offers two contrasting visions of how our country should work. President Obama and Vice President Biden seek to restore the shared prosperity that once defined the growth of our nation’s middle class while Gov. Romney and Rep. Ryan want to return to the trickle-down economic policies of the Bush era, which led inexorably to the Great Recession.

The contrast is clear. It’s no exaggeration to say the future growth and prosperity of Pennsylvania’s middle class is at stake. The decision made in this election will determine the strength of the state’s middle class and the course our country takes not just over the next two or four years but for decades to come.

President Obama and Vice President Biden are clear in their plans to restore shared prosperity. Gov. Romney and Rep. Ryan are much less open about their policy intentions, yet as this brief demonstrates, what they have unveiled enables us to examine the consequences in telling detail. In Pennsylvania and across our nation, low-income and middle-class Americans would sacrifice for the greater benefit of the wealthiest under the Romney-Ryan plan for the economy, taxes, and health care. In contrast, the Obama-Biden plan asks for shared sacrifice and shared prosperity that is necessary to grow our middle class and preserve our global economic competitiveness well into the 21st century.

Methodology

In order to estimate the effect of the spending plans of Republican presidential and vice presidential contenders Gov. Mitt Romney (R-MA) and Rep. Paul Ryan (R-WI) on federal funding for states, we begin by estimating the percentage cut in overall spending that would be required given their stated spending proposals. For federal spending they propose to:

• Cap all federal spending at 20 percent of gross domestic product
• Increase defense spending to 4 percent of gross domestic product
• Make no cuts to Medicare or Social Security in the next 10 years
• Repeal the Affordable Care Act, including the Medicare savings, which would increase Medicare spending by more than $700 billion
• Transform Medicaid into block grants to the states

In order to comply with the Romney-Ryan spending cap after accounting for the spending effects of the other policy proposals, the former Massachusetts governor and House Budget Committee chairman would need to cut all other federal spending—that is spending aside from Social Security, Medicare, Medicaid, defense, and net interest—by about 11 percent in 2013, growing to 63 percent by 2022, for an annual average of 39 percent over the next 10 years. These calculations rely on the following assumptions:

• The Romney-Ryan plan would reduce federal spending to fully comply with their proposed spending cap by the end of 2016.
• From 2013 through 2015 their plan would reduce overall federal spending to levels consistent with the House Republican budget plan, authored by Rep. Ryan.
• The Romney-Ryan plan to turn Medicaid into a block grant will be roughly consistent with Rep. Paul Ryan’s plan as detailed in his most recent budget plan.
• The baseline, against which the percentage cuts are calculated, includes a permanent fix to the Medicare Sustainable Growth Rate formula, a repeal of the “sequester” automatic spending cuts, and the drawdown of U.S. military forces in overseas combat operations.

In order to estimate how these cuts would specifically impact states, we started with U.S. Census Bureau data on federal aid to states in fiscal year 2010—the most recent year available. We then extrapolated fiscal year 2013 through 2022 funding by using the most recent Congressional Budget Office baseline estimates. For mandatory grants we used CBO’s spending growth projections specific to those particular programs. For discretionary grants we used the general growth projections for nondefense discretionary spending.

Since nearly all federal grants to states, with the notable exception of Medicaid, fall into the “other federal spending” category, we applied the annual percentage cut required to comply with the Romney-Ryan plan’s proposed cap to the baseline projections of all non-Medicaid grants. But since their plan has a separate policy for Medicaid, we did not apply the “across-the-board” percentage cut to that program. Instead, for Medicaid, we applied the annual percentage cut that would occur under the “block grant” proposal from Rep. Ryan that is broadly similar to Gov. Romney’s outlined proposal. This cut also includes the effect of repealing the Affordable Care Act.

SOURCE: AP/Bryan Oller

Republican vice-presidential candidate Rep. Paul Ryan (R-WI) speaks at WestPac Restorations in Colorado Springs, Colorado, Thursday, September 6, 2012.

View infographic: “The Real Cost of the Romney-Ryan Plan to Coloradans.”

View infographic: “Mitt Romney’s Dangerous Agenda for Colorado Women and their Families.”

Endnotes and citations are available in the PDF version of this issue brief.

Behind dramatically different economic visions and a deluge of attack ads, this election comes down to numbers. Many Coloradans—and many families across the United States—are asking what this will mean at the kitchen table. What will be the cost of a second term of President Barack Obama and Vice President Joe Biden or a first term led by former Massachusetts Gov. Mitt Romney and his running mate, Rep. Paul Ryan (R-WI)? The answer is that, in concrete and quantifiable ways, a Romney-Ryan presidency would mean higher taxes for the middle class, out-of-pocket health expenses for current seniors, fewer college loans and fewer health care options for young people, and the re-introduction of corporate outsourcing tax loopholes that have sent so many jobs overseas.

The nonprofit organizations ProgressNow Colorado and the Center for American Progress Action Fund examined the economic and tax agenda of Gov. Romney and Rep. Ryan, taking a close look at how their policies would affect the way Coloradans live and work. The price tag includes:

• Middle-class Coloradans would pay more in taxes while millionaires pay less. Millionaires in the state would receive an additional $87,000 in tax breaks under the tax plans of Gov. Romney and Rep. Ryan while middle-class families would pay up to $1,900 more in health care taxes and have to pay $1,066 more because of reductions in the mortgage interest deductions.
• Jobs would decline across Colorado. Gov. Romney and Rep. Ryan plan to provide extra tax incentives for corporations to outsource jobs and are pushing policy proposals to cripple the clean energy industry, jeopardizing 70,000 jobs across the state.
• Drastic cuts to federal spending would shrink Colorado’s middle class. The state stands to lose more than $32 billion in federal funding from 2013 through 2022, an average of $3.2 billion a year, from cuts to schools, law enforcement, highway repairs, job-training programs and more. These cuts would fall predominantly on middle-class and low-income families, especially the cuts to education programs and job training that would result in nearly $500 million in reduced support for the state in 2013 and 2014.
• Seniors in Colorado would lose health care benefits and pay more. Gov. Romney and Rep. Ryan would force seniors in the state to pay at least $609 more for their prescription drugs each year. At the same time, the Romney-Ryan plan to turn Medicare into a voucher would cost current seniors at least $11,000 more out of pocket.
• Women in Colorado would pay more for health care but receive less bang for their buck. Gov. Romney and Rep. Ryan would once again allow insurance companies to charge women more than men while taking away preventive care from more than 868,000 million women in the state.
• Young adults in Colorado would lose access to their families’ health insurance. Gov. Romney and Rep. Ryan promise to dismantle Obamacare, which would directly result in 50,000 young adults in Colorado losing the insurance they have today due to the Affordable Care Act.

The Romney-Ryan plan asks the vast majority of Americans to pay more, and then spends this revenue not on balancing the budget but rather on more tax breaks for the richest Americans. Gov. Romney’s top direct donor would receive over $2 billion in direct tax benefits from under the Romney-Ryan plan, while a typical police officer in Denver makes almost $64,000 a year would see their taxes increase by $1,200. These lopsided priorities are not a coincidence or a cruel joke. They are the logical extension of a trickle-down economic policy that failed under President George W. Bush but would be revived by Gov. Romney and Rep. Ryan.

President Obama and Vice President Biden, in contrast, believe that economic growth comes from a strong middle class, rather than being passed down from the wealthiest. They have passed and seek greater investments in education, job-training, infrastructure development, and scientific research and development to boost our nation’s long-term economic competiveness, coupled with targeted cuts in government spending and the end of the Bush-era tax cuts for the wealthiest Americans to bring the federal budget deficit under control.

The Republican contenders for the White House have tried to avoid details, but have nonetheless gone on the record with proposals that have enormous consequences for the economy, taxes, women’s health, health care, and energy security. ProgressNow Colorado and Center for American Progress Action Fund believe facts should matter in elections because they will certainly matter to families trying to live the American Dream. This report outlines the real cost of Romney-Ryan policies to Coloradans.

It is tempting for people across Colorado to start tuning out the election, defined too often by gaffes and thirty-second sound bites. But behind the politics are deep policy differences with profound consequences for the middle class.

Middle-class Coloradans pay more in taxes while millionaires pay less

The linchpin of the economic strategy championed by Gov. Romney and Rep. Ryan is to further enrich the wealthiest by doubling down on conservative, top-down tax policies. Those tax policies—even more top heavy than those implemented by President George W. Bush, which led to the weakest job creation in the post-war era despite giving the richest Americans massive tax cuts—would further fuel the single biggest factor driving up our national debt. Gov. Romney proposes approximately $5 trillion in new tax cuts on top of the cost of extending all of the Bush-era tax cuts.

But instead of learning the lessons from past failed policies, Gov. Romney’s plan is to provide the wealthiest individuals and corporations with additional tax breaks, while asking the middle class, seniors, and students to pay even more.

Here’s how the Romney-Ryan tax plan would affect Coloradans.

Raising taxes on middle-class Colorado families

The tax plan of the two Republican candidates gives massive tax cuts to the richest Americans and corporations while purporting to collect the same amount of revenue as our current tax policies. The only way his plan adds up is by raising taxes on middle-class families in Colorado and throughout the country. The nonpartisan Tax Policy Center found that Gov. Romney’s tax plan would require raising taxes on middle-class families with children who have incomes under $200,000 by an average of $2,000 per family. It would raise the average tax bill for all middle-class taxpayers by $500.

Their tax plan would raise taxes on low-income and middle-class families by forcing deep cuts in tax benefits such as the child tax credit, the mortgage interest deduction, the exemption for employer-provided health benefits, and the deduction for state and local taxes. Though Gov. Romney and Rep. Ryan repeatedly refuse to say which specific tax breaks they would eliminate or reduce, the Tax Policy Center calculates that these major tax benefits for middle-class families would have to be reduced by 58 percent to pay for his tax cut for the rich. That 58 percent cut does not even account for the fact that middle-class taxpayers would be forced to pay for the $1.1 trillion corporate tax cut also championed by the Republican ticket.

Here is how this hidden part of the Romney-Ryan tax plan would affect low-income and middle-class families in Colorado:

• 2.7 million. The number of families in the state that rely on health insurance from their employer, which is currently not taxed.
• $1,200 – $1,900. The amount those middle-class families would pay in higher taxes if the exemption for employer health insurance is reduced by 58 percent.

• 714,000. The number of middle-class families in the state that file for the mortgage interest deduction on their federal taxes.
• $1,066. The average loss in mortgage interest deduction for middle-class families in the state if the deduction is cut by 58 percent.

• 829,000. The number of middle-class families in the state that deduct state and local taxes from their federal income taxes.
• $670. The amount on average that middle class families in the state will pay in higher taxes if the deduction for state and local taxes is cut by 58 percent.

• 404,000. The number of middle-class families in the state that benefit from the child tax credit.
• $580. The amount that families in the state will pay in higher taxes per child if the child tax credit is reduced by 58 percent.

• 95,000. The number of low-income and middle-class families in the state that claim the child care tax credit (in addition to the child tax credit detailed above).
• $318. The amount that families in the state will pay in higher taxes per child if the child care tax credit (in addition to the child tax credit detailed above) is reduced by 58 percent.

• 661,000. The number of low-income working families in the state that qualify for the earned income tax credit and the refundable portion of the child tax credit.
• $700. The tax increase that 190,000 of those families with a total of 345,000 children) would pay on average if the improvements to those tax credits passed under President Obama are rolled back, as the Romney-Ryan plan proposes.

• 152,000. The number of middle-class Colorado families and students paying for college educations that use President Obama’s American Opportunity Tax Credit.
• $2,100. The average benefit these families and students receive from the American Opportunity Tax Credit. The Romney-Ryan tax plan would eliminate this credit, leaving families in the state with no credit or a less valuable tuition credit.

All these tax hikes on low-income and middle-class families would come courtesy of the Romney-Ryan tax plan’s overarching emphasis on providing even more tax breaks to the top income earners in our country. Their plan would force middle-class families to pay more in taxes than they do today so that the richest among us pay less.

The bottom line for Coloradans: The 4,400 millionaires in the state would see an additional tax cut of at least $87,000. The total costs for these tax cuts for all the citizens of the state would be at least $380 million.

Jobs would decline across Colorado

Gov. Romney famously argued that we should have “let Detroit go bankrupt,” never mind the consequences for workers. The Romney-Ryan plan takes the same approach to job creation, which would be devastating to our economy and the lives of tens of millions of Americans. The Romney-Ryan plan for job creation is so out of touch with what’s best for our country because it relies on the same top-down economics that created the worst job growth in decades under President George W. Bush.

Gov. Romney and Rep. Ryan claim they will create 12 million new jobs by the end of 2016, the end of their presumptive first term. In fact, their proposal would kill 360,000 jobs next year alone. Most telling, their plan includes even greater tax incentives for outsourcing that would actively undermine U.S. employment, leading to 800,000 more jobs being created in foreign countries.

Here’s what it would mean for Colorado.

Letting the auto industry go bankrupt

The auto industry is vital to health of our economy. President Obama’s decision to save the U.S. auto industry prevented the immediate loss of over 1 million American jobs across the country and nearly 9,000 in Colorado.

And now the auto industry is roaring back. General Motors Co. is once again the largest automaker in the world. The industry in total has added over 236,000 jobs since June 2009.

In addition, another 8,500 jobs are projected to be created in Colorado specifically because of new fuel economy standards finalized last month. The Romney-Ryan campaign denounced the standards, which will save the average American family $8,000 once fully implemented, as “extreme.”

How clean energy helped power new jobs in the state

Gov. Romney and Rep. Ryan present a clear vision for America’s energy future. They want more lucrative tax breaks for Big Oil companies and their allies while slashing investments in clean energy technologies that create U.S. jobs and keep the United States competitive in the global marketplace.

Individual states across the nation have realized the promise of clean energy, creating tens of thousands of jobs and reaping significant tax revenue while improving the quality of air and water for their residents. The Romney-Ryan clean energy plan, however, is to attack the industry and undermine its growth, calling green jobs “illusory” and opposing key wind tax credits that support thousands of jobs in Colorado. The Centennial State benefited tremendously from its Renewable Portfolio Standard. The state has required investor-owned utilities to provide 30 percent of their electricity through renewable energy by 2020.

There are more than 70,000 green jobs in Colorado, according to the U.S. Bureau of Labor Statistics, and nationwide the sector employs more than 3 million Americans. More than 4,000 of those Colorado jobs are wind jobs. Colorado is a national wind energy leader, generating the sixth-highest percentage of power from wind of any state and powering the equivalent of 500,000 homes. In 2011 Colorado’s installed wind capacity grew nearly 39 percent, according to the American Wind Energy Association. Colorado’s wind resources could provide nearly 25 times of the state’s current electricity needs, according to a National Renewable Energy Lab resource assessment.

But wind is not the only clean energy source that is helping Colorado’s economy. Colorado has the fifth-largest solar market in the United States, with more than 294 solar companies operating in Colorado and creating a projected 3,575 jobs through 2016. Colorado is producing enough solar energy to power more than 21,000 homes.

Renewable electricity has nearly doubled under the Obama administration, and the clean energy economy grew by 8.3 percent from 2003 to 2010—almost double the overall economy’s growth during those years—but Gov. Romney’s plan threatens the 70,000 clean energy jobs in Colorado and risks the creation of thousands more in the years to come.

How clean energy on public lands can power new jobs and investment in the state

Gov. Romney and Rep. Ryan’s vision for America’s energy future is to hand the keys to America’s public lands to the Big Oil companies by giving states control of energy development on public lands. As The New York Times put it, “States, as a rule, tend to be interested mainly in resource development.”

Westerners understand that these lands that belong to all Americans have multiple uses, such as hunting, fishing, grazing, and recreation. Gov. Romney recently told the Reno Gazette Journal, however, that he did not know the “purpose” of public lands, which may explain his myopic focus on fossil fuel development on them, while ignoring the vast clean energy future the federal estate could help support.

The American West already leads the way in construction of clean renewable electricity projects on the ground, spurred forward by policies including state renewable electricity standards and government investments in clean technologies. A recent Bureau of Labor Statistics study reflects this success, determining that in 2010, “green goods and services” accounted for 72,452 jobs in Colorado.

Another 14,996 jobs are estimated to be possible, if Colorado builds renewable energy on public lands according to the federal government’s “reasonably forseeable development scenarios” for the likelihood of renewable energy development on public lands in Colorado. These analyses examine the economic and policy conditions in states to determine how much renewable energy on public lands could realistically be generated over 20 years. According to those scenarios, Colorado could reasonably be the location for the development of 2,329 megawatts of wind, solar, and geothermal.

Additionally, building these projects will create direct investment in Colorado. Many large financial institutions plan to invest in clean energy—Wells Fargo & Co., Goldman Sachs Group Inc., and Bank of America Corp. have pledged to invest a combined $120 billion in the clean energy technologies sector over the coming years. It is estimated that potential direct investment in the renewable energy sector from development on public lands in Colorado would be $10.6 billion.

Gov. Romney and Rep. Ryan’s plan to put the states in charge of energy development on public lands threatens to undermine this vast potential for renewable energy development, with states potentially making oil and gas drilling the primary use of public lands in the region. The International Association of Drilling Contractors said the proposal would cause operators to “tear their hair out.” In addition, a similar proposal that would have given the state of Arizona control of public lands within its state borders was rejected by Republican Gov. Jan Brewer because she was “concerned about the lack of certainty” it would create.

Drastic cuts to federal spending would shrink Colorado’s middle class

Gov. Romney and Rep. Ryan promise enormous cuts in overall federal spending, totaling more than $4 trillion over 10 years. At the same time, they have promised enormous amounts of new spending for the Pentagon—more money, in fact, than the Pentagon itself says it needs. They’ve also offered assurances that there will be no cuts to Medicare or Social Security for those over the age of 55, a promise at odds with their vow to repeal the Affordable Care Act, which improved Medicare benefits and lowered costs for current seniors. But taken together, these promises necessarily mean that the entire bulk of the Romney-Ryan spending cuts will necessarily fall on the remaining 40 percent of the budget. And unfortunately for states, nearly all of their federal funding can be found in that remaining 40 percent.

In 2010 Colorado received more than $7 billion in federal aid. This money helped support Colorado’s schools, law enforcement efforts, highway repairs, and job-training programs. It helped put food on Colorado families’ tables and it helped provide health insurance to almost one in every seven Coloradans, including more than 480,000 of Colorado’s children. But that funding would be dramatically curtailed under the proposed budget policies of Gov. Romney and Rep. Ryan. In fact, their budget plan would cost Colorado approximately $503 million in federal funding in 2013 alone, and the costs to Colorado would grow to nearly $3 billion annually by 2016. (see Figure 1)

The simple math dictates that for the Romney-Ryan plan to achieve their spending goal, they will need to cut nearly all federal grants to the states by a staggering 40 percent by 2016. And that is in addition to the nearly 30 percent cut to Medicaid that would result from their plan to transform Medicaid into a block grant. Altogether, under the Romney-Ryan plan, Colorado stands to lose more than $32.7 billion in federal funding from 2013 through 2022, an average of more than $3.2 billion a year. (see Methodology)

Then there are the other federal programs that help low-income and middle-class families with their children’s education. The Romney-Ryan education plan, dubbed “A Chance for Every Child,” would eliminate federal requirements that low-performing schools take action to improve the education of their students, end the federal requirement that teachers obtain certification to teach, and privatize public education by turning federal funds for low-income and special-needs students into vouchers. Gov. Romney and Rep. Ryan would also sharply defund the Pell Grant for aspiring college students from poor families.

In Colorado the consequences would be devastating. Under the Romney-Ryan plan:

• The Head Start program for pre-Kindergarten children would be crippled. Under their plan, in 2013 alone Head Start in Colorado would lose $25 million, resulting in 3,734 slots for children eliminated and 1,870 job losses. In 2014 those numbers jump to $58 million in cuts, resulting in 7,662 slots for children eliminated and 4,404 jobs lost.
• Special education funding would be slashed. Under their plan $25 million in cuts for special-education grants would result in the costs for 13,250 students shifting to the state and jeopardizing their special instruction, and the loss of 373 jobs in 2013 alone. But in 2014 these cuts become even more drastic with the cuts increasing to $57 million, resulting in 33,937 children at risk of no longer having their classes and 818 jobs being cut.
• Big cuts for colleges and aspiring students. The Romney-Ryan budget would so severely restrict Pell Grant eligibility that more than 1 million low- and middle-income students would no longer be able to count on them to help pay for college. Cuts to these grants would be devastating to the 158,009 Colorado students who depend upon them to further their education. The average Pell Grant to Colorado students under the Romney-Ryan plan would be cut by about $810 a year.

Gov. Romney gave his answer to student’s needing money earlier this year during an appearance at Otterbein University, when he advised cash-strapped students to “borrow money if you have to from your parents.” He followed up this recommendation by recounting a story about a friend who borrowed $20,000 from his parents, not an opportunity most young people have. If not realistic, this advice is not entirely surprising, given that Gov. Romney paid for college by selling stock options given to him by his CEO father.

Seniors in Colorado would lose health care benefits and pay more

Gov. Romney and Rep. Ryan plan to convert our nation’s Medicare program into a voucher system for people who are under 55 years of age. It is that simple. Their candidacy has become infamous for its startling determination to lie about President Obama’s plans for Medicare and the true nature of their own plan for the vital program. Under their plan, seniors beginning in 2023 would receive vouchers to purchase health insurance from either private insurance companies or from traditional Medicare. If premiums for traditional Medicare or the private plan they choose cost more than the voucher amount, then seniors would have to pay the difference themselves.

Gov. Romney and Rep. Ryan claim that no one over 55 will be affected by their plan to turn Medicare into a voucher. But that’s simply not true. The reason: Seniors across our country are already benefiting from changes to Medicare because of Obamacare.

In Colorado 179,652 seniors who rely on their Medicare benefits received one or more preventive services—such as cancer screenings, diabetes testing, and bone density scans—free of charge through their Medicare plan. This is saving Colorado seniors money each year and also providing them with the care needed to protect their health.

What’s more, Gov. Romney and Rep. Ryan would open up the prescription drug donut hole that Obamacare is closing. Since the law was enacted, Colorado seniors have saved $43.8 million on prescription drug costs because Obamacare is closing the loophole. In 2012 alone, more than 14,000 Colorado seniors and people with disabilities saved $8.7 million. While they each have saved an average of $609 this year, Gov. Romney and Rep. Ryan would force them to once again pay for this out of pocket.

Because of the increased drug costs and higher Medicare premiums, the Romney-Ryan voucher plan would raise health care costs for current seniors by $11,000 for the average person who is 65 years old today. And it’s even worse for the future seniors. Because of cost shifting and increases in system wide health care costs, Medicare costs for future seniors who become eligible for Medicare after 2022 will increase dramatically under the Romney-Ryan plan. Specifically, upon retirement:

• Today’s 54-year-old will have to pay increased Medicare costs of $59,450
• Today’s 49-year-old will have to pay $124,626 more
• Today’s 39-year-old will have to pay $216,631 more
• Today’s 29-year-old will have to save $331,170 more

These estimates are conservative because we examined the least radical of the various Romney-Ryan proposals to calculate our estimates. Had we instead used the budget plan authored by Rep. Ryan for the House of Representatives in 2011, the nonpartisan Congressional Budget Office estimates it would result in increased costs that are much greater, forcing current seniors to pay $6,400 more per year for their health care costs.

Women in Colorado would pay more for health care but receive less bang for their buck

Make no mistake, whether we’re talking about women’s health or reproductive rights, Gov. Romney and Rep. Ryan want to take women backward. Women’s health has been under constant siege since Republicans overtook the House of Representatives and some additional state governments in the 2010 midterm elections.

Colorado Republicans have been eager to take on women’s health. Earlier this year the state legislature considered a Republican bill that would’ve criminalized abortion and establish “personhood” status for fetuses. The Republican-controlled Colorado House of Representatives also rejected a measure passed by the Democrat-controlled Senate that would’ve provided women with more information about where to obtain reproductive health services, including emergency contraception.

Indeed, the Republican record includes the all-male U.S. congressional panel debating insurance coverage for contraception, 33 attempts to repeal the health reform law and all of its benefits for women, vaginal probes in Virginia and elsewhere, and efforts to defund Planned Parenthood clinics around the country. Gov. Romney and Rep. Ryan even endorse the radical “personhood” measures that would outlaw abortion in all circumstances and could potentially ban common forms of birth control and in-vitro fertilization. Fortunately, Coloradans are not at all enamored with this position—a group attempting to put a personhood measure on the ballot in Colorado once again this year failed to collect the minimum number of signatures needed to do so. More than 70 percent of Colorado voters voted against personhood measures in 2008 and 2010.

Yet Gov. Romney and Rep. Ryan want to launch a more broadly insidious campaign against women’s health. If elected president, Gov. Romney promises to repeal the Affordable Care Act “on day one” of his presidency. Why is Obamacare so important to women’s health? Due largely to the high cost of health insurance coverage—especially for women without access to employer-based coverage—19 million American women between the ages of 18 and 64 were uninsured in 2011, including 248,700 Colorado women.

Even if insured, women tend to have higher out-of-pocket costs than men. Women of reproductive age spend 68 percent more than men on health care expenses. And more than half of American women report delaying needed medical care because of cost, while one-third of women report giving up basic necessities such as food, heat, or rent to pay for health care expenses. In 2014 the health care law will prohibit insurance companies from their practice of routinely denying women coverage for gender-related pre-existing conditions such as breast cancer, a Cesarean section, domestic violence, or sexual assault. And Obamacare has already prohibited insurance companies from continuing to deny coverage to the 72,500 Colorado children who have a pre-existing condition.

Obamacare also makes health care more affordable by guaranteeing no-cost coverage for recommended preventive services such as mammograms, Pap smears, well-baby care, contraception, gestational diabetes screening, lactation supports, and much more. Approximately 47 million women will have access to women’s preventive services without cost-sharing under the Affordable Care Act, including 868,691 women in Colorado.

Young adults in Colorado would lose access to their families’ health insurance

The Millennial generation of Americans born in the late 1970s and early 1980s also face staggering costs and loss of care from the Romney-Ryan plan for health care. Gov. Romney’s promise to dismantle Obamacare would result in 50,000 young adults in Colorado losing the access they have today to their families’ health insurance due to the Affordable Care Act. And because of the Romney-Ryan plan to turn Medicare into a voucher program, today’s average 29 year old will have to save $331,200 more to afford their health care upon retirement under the Romney-Ryan plan.

Conclusion

The 2012 presidential election offers two contrasting visions of how our country should work. President Obama and Vice President Biden seek to restore the shared prosperity that once defined the growth of our nation’s middle class while Gov. Romney and Rep. Ryan want to return to the trickle-down economic policies of the Bush era, which led inexorably to the Great Recession.

The contrast is clear. It’s no exaggeration to say the future growth and prosperity of Colorado’s middle class is at stake. The decision made in this election will determine the strength of the state’s middle class and the course our country takes not just over the next two or four years but for decades to come.

President Obama and Vice President Biden are clear in their plans to restore shared prosperity. Gov. Romney and Rep. Ryan are much less open about their policy intentions, yet as this brief demonstrates, what they have unveiled enables us to examine the consequences in telling detail. In Colorado and across our nation, low-income and middle-class Americans would sacrifice for the greater benefit of the wealthiest under the Romney-Ryan plan for the economy, taxes, and health care. In contrast, the Obama-Biden plan asks for shared sacrifice and shared prosperity that is necessary to grow our middle class and preserve our global economic competitiveness well into the 21st century.

Methodology

In order to estimate the effect of the spending plans of Republican presidential and vice presidential contenders Gov. Mitt Romney (R-MA) and Rep. Paul Ryan (R-WI) on federal funding for states, we begin by estimating the percentage cut in overall spending that would be required given their stated spending proposals. For federal spending they propose to:

• Cap all federal spending at 20 percent of gross domestic product
• Increase defense spending to 4 percent of gross domestic product
• Make no cuts to Medicare or Social Security in the next 10 years
• Repeal the Affordable Care Act, including the Medicare savings, which would increase Medicare spending by more than $700 billion
• Transform Medicaid into block grants to the states

In order to comply with the Romney-Ryan spending cap after accounting for the spending effects of the other policy proposals, the former Massachusetts governor and House Budget Committee chairman would need to cut all other federal spending—that is spending aside from Social Security, Medicare, Medicaid, defense, and net interest—by about 11 percent in 2013, growing to 63 percent by 2022, for an annual average of 39 percent over the next 10 years. These calculations rely on the following assumptions:

• The Romney-Ryan plan would reduce federal spending to fully comply with their proposed spending cap by the end of 2016.
• From 2013 through 2015 their plan would reduce overall federal spending to levels consistent with the House Republican budget plan, authored by Rep. Ryan.
• The Romney-Ryan plan to turn Medicaid into a block grant will be roughly consistent with Rep. Paul Ryan’s plan as detailed in his most recent budget plan.
• The baseline, against which the percentage cuts are calculated, includes a permanent fix to the Medicare Sustainable Growth Rate formula, a repeal of the “sequester” automatic spending cuts, and the drawdown of U.S. military forces in overseas combat operations.

In order to estimate how these cuts would specifically impact states, we started with U.S. Census Bureau data on federal aid to states in fiscal year 2010—the most recent year available. We then extrapolated fiscal year 2013 through 2022 funding by using the most recent Congressional Budget Office baseline estimates. For mandatory grants we used CBO’s spending growth projections specific to those particular programs. For discretionary grants we used the general growth projections for nondefense discretionary spending.

Since nearly all federal grants to states, with the notable exception of Medicaid, fall into the “other federal spending” category, we applied the annual percentage cut required to comply with the Romney-Ryan plan’s proposed cap to the baseline projections of all non-Medicaid grants. But since their plan has a separate policy for Medicaid, we did not apply the “across-the-board” percentage cut to that program. Instead, for Medicaid, we applied the annual percentage cut that would occur under the “block grant” proposal from Rep. Ryan that is broadly similar to Gov. Romney’s outlined proposal. This cut also includes the effect of repealing the Affordable Care Act.

View infographic: “The Real Cost of the Romney-Ryan Plan to Coloradans”

SOURCE: AP/Mary Altaffer

Republican presidential candidate Mitt Romney, accompanied by his vice-presidential running mate Rep. Paul Ryan (R-WI), speaks during a campaign event, Friday, August 31, 2012.

View infographic: “The Real Cost of the Romney-Ryan Plan to Nevadans”

Behind dramatically different economic visions and a deluge of attack ads, this election comes down to numbers. Many Nevadans—and many families across the United States—are asking what this will mean at the kitchen table. What will be the cost of a second term of President Barack Obama and Vice President Joe Biden or a first term led by former Massachusetts Gov. Mitt Romney and his running mate, Rep. Paul Ryan (R-WI)? The answer is that, in concrete and quantifiable ways, a Romney-Ryan presidency would mean higher taxes for the middle class, out-of-pocket health expenses for current seniors, fewer college loans and fewer health care options for young people, and the re-introduction of corporate outsourcing tax loopholes that have sent so many jobs overseas.

The nonprofit organizations ProgressNow Nevada and the Center for American Progress Action Fund examined the economic and tax agenda of Gov. Romney and Rep. Ryan, taking a close look at how their policies would affect the way Nevadans live and work. The price tag includes:

• Middle-class Nevadans would pay more in taxes while millionaires pay less. Millionaires in the state would receive an additional $87,000 in tax breaks under the tax plans of Gov. Romney and Rep. Ryan while middle-class families would pay up to $1,800 more in health care taxes and and have to pay $1,066 more because of reductions in the mortgage interest deductions.
• Jobs would decline across Nevada. Gov. Romney and Rep. Ryan plan to provide extra tax incentives for corporations to outsource jobs and are pushing policy proposals to cripple the clean energy industry, jeopardizing tens of thousands of jobs across the state.
• Drastic cuts to federal spending would shrink Nevada’s middle class. The state stands to lose more than $15 billion in federal funding from 2013 through 2022, an average of more than $1.5 billion a year, from cuts to schools, law enforcement, highway repairs, job-training programs and more. These cuts would fall predominantly on middle-class and low-income families, especially cuts to education programs that would result in nearly $250 million in reduced federal support for education and job training in the state in 2013 and 2014 alone.
• Seniors in Nevada would lose health care benefits and pay more. Gov. Romney and Rep. Ryan would force seniors in the state to pay at least $590 more for their prescription drugs each year. At the same time, the Romney-Ryan plan to turn Medicare into a voucher would cost current seniors at least $11,000 more out of pocket.
• Women in Nevada would pay more for health care but receive less bang for their buck. Gov. Romney and Rep. Ryan would once again allow insurance companies to charge women more than men while taking away preventive care from at least 391,000 women in the state.
• Young adults in Nevada would lose access to their families’ health insurance. Gov. Romney and Rep. Ryan promise to dismantle Obamacare, which would directly result in 33,000 young adults in Nevada losing the insurance they have today due to the Affordable Care Act.

The Romney-Ryan plan asks the vast majority of Americans to pay more, and then spends this revenue not on balancing the budget but rather on more tax breaks for the richest Americans. Gov. Romney’s top direct donor would receive over $2 billion in direct tax benefits from under the Romney-Ryan plan, while a typical firefighter in Reno making a little over $52,000 a year would see their taxes increase by $1,450. These lopsided priorities are not a coincidence or a cruel joke. They are the logical extension of a trickle-down economic policy that failed under President George W. Bush but would be revived by Gov. Romney and Rep. Ryan.

President Obama and Vice President Biden, in contrast, believe that economic growth comes from a strong middle class, rather than being passed down from the wealthiest. They have passed and seek greater investments in education, job-training, infrastructure development, and scientific research and development to boost our nation’s long-term economic competiveness, coupled with targeted cuts in government spending and the end of the Bush-era tax cuts for the wealthiest Americans to bring the federal budget deficit under control.

The Republican contenders for the White House have tried to avoid details, but have nonetheless gone on the record with proposals that have enormous consequences for the economy, taxes, women’s health, health care, and energy security. ProgressNow Nevada and Center for American Progress Action Fund believe facts should matter in elections because they will certainly matter to families trying to live the American Dream. This report outlines the real cost of Romney-Ryan policies to Nevadans.

It is tempting for people across Nevada to start tuning out the election, defined too often by gaffes and thirty-second sound bites. But behind the politics are deep policy differences with profound consequences for the middle class.

Middle-class Nevadans pay more in taxes while millionaires pay less

The linchpin of the economic strategy championed by Gov. Romney and Rep. Ryan is to further enrich the wealthiest by doubling down on conservative, top-down tax policies. Those tax policies—even more top heavy than those implemented by President George W. Bush, which led to the weakest job creation in the post-war era despite giving the richest Americans massive tax cuts—would further fuel the single biggest factor driving up our national debt. Gov. Romney proposes approximately $5 trillion in new tax cuts on top of the cost of extending all of the Bush-era tax cuts.

But instead of learning the lessons from past failed policies, Gov. Romney’s plan is to provide the wealthiest individuals and corporations with additional tax breaks, while asking the middle class, seniors, and students to pay even more. Here’s how the Romney-Ryan tax plan would affect Nevadans.

Raising taxes on middle-class Nevada families

The tax plan of the two Republican candidates gives massive tax cuts to the richest Americans and corporations while purporting to collect the same amount of revenue as our current tax policies. The only way his plan adds up is by raising taxes on middle-class families in Nevada and throughout the country. The nonpartisan Tax Policy Center found that Gov. Romney’s tax plan would require raising taxes on middle-class families with children who have incomes under $200,000 by an average of $2,000 per family. It would raise the average tax bill for all middle-class taxpayers by $500.

Their tax plan would raise taxes on low-income and middle-class families by forcing deep cuts in tax benefits such as the child tax credit, the mortgage interest deduction, the exemption for employer-provided health benefits, and the deduction for state and local taxes. Though Gov. Romney and Rep. Ryan repeatedly refuse to say which specific tax breaks they would eliminate or reduce, the Tax Policy Center calculates that these major tax benefits for middle-class families would have to be reduced by 58 percent to pay for his tax cut for the rich. That 58 percent cut does not even account for the fact that middle-class taxpayers would be forced to pay for the $1.1 trillion corporate tax cut also championed by the Republican ticket.

Here is how this hidden part of the Romney-Ryan tax plan would affect low-income and middle-class families in Nevada:

• 1.3 million. The number of families in the state that rely on health insurance from their employer, which is currently not taxed.
• $1,100 – $1800. The amount those middle-class families would pay in higher taxes if the exemption for employer health insurance is reduced by 58 percent.

• 291,000. The number of middle-class families in the state that file for the mortgage interest deduction on their federal taxes.
• $1,066. The average loss in mortgage interest deduction for middle-class families in the state if the deduction is cut by 58 percent

• 352,000. The number of middle-class families in the state that deduct state and local taxes from their federal income taxes.
• $670. The amount on average that middle class families in the state will pay in higher taxes if the deduction for state and local taxes is cut by 58 percent.

• 226,000. The number of middle-class families in the state that benefit from the child tax credit.
• $580. The amount that families in the state will pay in higher taxes per child if the child tax credit is reduced by 58 percent.

• 48,000. The number of low-income and middle-class families in the state that claim the child care tax credit (in addition to the child tax credit detailed above).
• $318. The amount that families in the state will pay in higher taxes per child if the child care tax credit (in addition to the child tax credit detailed above) is reduced by 58 percent.

• 453,000. The number of low-income working families in the state that qualify for the earned income tax credit or the refundable portion of the child tax credit.
• $1,017. The tax increase for 113,000 of those families (with a total of 247,000 children) would pay on average if the improvements to those tax credits passed under President Obama are rolled back, as the Romney-Ryan plan proposes.

• 81,000. The number of middle-class Nevada families and students paying for college educations that use President Obama’s American Opportunity Tax Credit.
• $1,700. The average benefit these families and students receive from the American Opportunity Tax Credit. The Romney-Ryan tax plan would eliminate this credit, leaving families in the state with no credit or a less valuable tuition credit.

All these tax hikes on low-income and middle-class families would come courtesy of the Romney-Ryan tax plan’s overarching emphasis on providing even more tax breaks to the top income earners in our country. Their plan would force middle-class families to pay more in taxes than they do today so that the richest among us pay less.

The bottom line for Nevadans: The 2,400 millionaires in the state would see an additional tax cut of at least $87,000. The total costs for these tax cuts for all the citizens of the state would be at least $206 million.

Jobs would decline across Nevada

Gov. Romney famously told The Las Vegas Review Journal’s editorial board that the foreclosure crisish just had to “run its course and hit the bottom.” The Romney-Ryan plan takes the same approach to job creation, which would be devastating to our economy and the lives of tens of millions of Americans. The Romney-Ryan plan for job creation is so out of touch with what’s best for our country because it relies on the same top-down economics that created the worst job growth in decades under President George W. Bush.

Gov. Romney and Rep. Ryan claim they will create 12 million new jobs by the end of 2016, the end of their presumptive first term. In fact, their proposal would kill 360,000 jobs next year alone. Most telling, their plan includes even greater tax incentives for outsourcing that would actively undermine U.S. employment, leading to 800,000 more jobs being created in foreign countries.

Here’s what it would mean for Nevada.

Letting the auto industry go bankrupt

The auto industry is vital to the Bhealth of our economy. President Obama’s decision to save the U.S. auto industry prevented the immediate loss of over 1 million American jobs across the country.

And now the auto industry is roaring back. General Motors Co. is once again the largest automaker in the world. The industry in total has added over 236,000 jobs since June 2009. In addition, another 4,400 jobs are projected to be created in Nevada specifically because of new fuel economy standards finalized last month. The Romney-Ryan campaign denounced the standards, which will save the average American family $8,000 once fully implemented, as “extreme.”

How clean energy helped power new jobs in the state

Gov. Romney and Rep. Ryan present a clear vision for America’s energy future. They want more lucrative tax breaks for Big Oil companies and their allies while slashing investments in clean energy technologies that create U.S. jobs and keep the United States competitive in the global marketplace.

Instead of investing in the growing clean energy economy and acknowledging the benefits of clean energy to Nevada’s economy and health of its residents, the Romney-Ryan clean energy plan is to attack the industry and undermine its growth, calling green jobs “illusory,” and opposing renewable energy programs that support thousands of jobs and reap significant tax revenue for Nevada There are nearly 20,000 green jobs in Nevada, according to the U.S. Bureau of Labor Statistics, and nationwide, the sector employs more than 3 million Americans. The state is ranked first in solar and geothermal energy production on a per-person basis, and received $158.5 million of private-sector investments alone from 2009 to 2010. Nevada is currently producing enough solar energy to power over 32,000 homes.

Solar and geothermal are not the only clean energy sources helping Nevada’s economy. Wind resources could provide nearly 60 percent of the state’s current electricity needs, according to the National Renewable Energy Lab. These investments could create new manufacturing and construction jobs as well.

Renewable electricity has nearly doubled under the Obama administration, and the clean energy economy grew by 8.3 percent from 2003-2010, almost double of what the overall economy grew during those years, but Gov. Romney’s plan threatens the tens of thousands clean energy jobs in Nevada and risks the creation of thousands more in the years to come.

How clean energy on public lands can power new jobs and investment in the state

Gov. Romney and Rep. Ryan’s vision for America’s energy future is to hand the keys to America’s public lands to the Big Oil companies by giving states control of energy development on public lands. As The New York Times put it, “States, as a rule, tend to be interested mainly in resource development.”

Westerners understand that these lands that belong to all Americans have multiple uses, such as hunting, fishing, grazing, and recreation. However, Gov. Romney recently told The Reno Gazette Journal that he did not know the “purpose” of public lands, which may explain his myopic focus on fossil fuel development on them, while ignoring the vast clean energy future the federal estate could help support.

Already, the American West leads the way in construction of clean renewable electricity projects on the ground, spurred forward by policies including state renewable electricity standards and government investments in clean technologies.

While there are nearly 20,000 green jobs in Nevada right now, another 26,151 jobs are estimated to be possible if Nevada builds renewable energy on public lands according to the federal government’s “reasonably forseeable development scenarios” for the likelihood of renewable energy development on public lands in Nevada. These analyses examine the economic and policy conditions in states to determine how much renewable energy on public lands could realistically be generated over 20 years. According to those scenarios, Nevada could reasonably be the location for the development of 4,682 megawatts of wind, solar, and geothermal.

Additionally, building these projects will create direct investment in Nevada. Many large financial institutions plan to invest in clean energy. Wells Fargo & Co., Goldman Sachs Group Inc., and Bank of America Corp. have pledged to invest a combined $120 billion in the clean energy technologies sector over the coming years. It is estimated that potential direct investment in the renewable energy sector from development on public lands in Nevada would be $15.3 billion.

Gov. Romney and Rep. Ryan’s plan to put the states in charge of energy development on public lands threatens to undermine this vast potential for renewable energy development, with states potentially making oil and gas drilling the primary use of public lands in the region. The International Association of Drilling Contractors said that the proposal would cause operators to “tear their hair out.” In addition, a similar proposal that would have given the state of Arizona control of public lands within its state borders was rejected by conservative Governor Jan Brewer because she was “concerned about the lack of certainty” it would create.

Drastic cuts to federal spending would shrink Nevada’s middle class

Gov. Romney and Rep. Ryan promise enormous cuts in overall federal spending, totaling more than $4 trillion over 10 years. At the same time, they have promised enormous amounts of new spending for the Pentagon—more money, in fact, than the Pentagon itself says it needs. They’ve also offered assurances that there will be no cuts to Medicare or Social Security for those over the age of 55, a promise at odds with their vow to repeal the Affordable Care Act, which improved Medicare benefits and lowered costs for current seniors. But taken together, these promises necessarily mean that the entire bulk of the Romney-Ryan spending cuts will necessarily fall on the remaining 40 percent of the budget. And unfortunately for states, nearly all of their federal funding can be found in that remaining 40 percent.

In 2010 Nevada received nearly $3.5 billion in federal aid. This money helped support Nevada’s schools, law enforcement efforts, highway repairs, and job-training programs. It helped put food on Nevada families’ tables and it helped provide health insurance to about one in every ten Nevadans, including nearly 200,000 of Nevada’s children. But that funding would be dramatically curtailed under the proposed budget policies of Gov. Romney and Rep. Ryan. In fact, their budget plan would cost Nevada approximately $254 million in federal funding in 2013 alone, and the costs to Nevada would grow to over $1.3 billion annually by 2016. (see Figure 1)

The simple math dictates that for the Romney-Ryan plan to achieve their spending goal, they will need to cut nearly all federal grants to the states by a staggering 40 percent by 2016. And that is in addition to the nearly 30 percent cut to Medicaid that would result from their plan to transform Medicaid into a block grant. Altogether, under the Romney-Ryan plan, Nevada stands to lose more than $15 billion in federal funding from 2013 through 2022, an average of more than $1.5 billion a year. (see methodology on page 12) Then there are the other federal programs that help low-income and middle-class families with their children’s education. The Romney-Ryan education plan, dubbed “A Chance for Every Child,” would eliminate federal requirements that low-performing schools take action to improve the education of their students, end the federal requirement that teachers obtain certification to teach, and privatize public education by turning federal funds for low-income and special-needs students into vouchers. Gov. Romney and Rep. Ryan would also sharply defund the Pell Grant for aspiring college students from poor families.

In Nevada the consequences would be devastating. Under the Romney-Ryan plan:

• The Head Start program for pre-Kindergarten children would be crippled. Under their plan, in 2013 alone Head Start in Nevada would lose $4 million, resulting in 465 slots for children eliminated and 164 job losses. In 2014 those numbers jump to $10 million in cuts, resulting in 1,037 slots for children eliminated and 388 jobs lost.
• Special education funding would be slashed. Under their plan $12 million in cuts for special-education grants would result in the costs for 7,860 students’ special instruction being shifted to the states, jeopardizing their education and costing 150 jobs to be lost. But in 2014, these cuts become even more drastic with the cuts increasing to $27 million, resulting in 17,702 children at risk of no longer having their classes and 326 jobs being cut.
• Big cuts for colleges and aspiring students. The Romney-Ryan budget would so severely restrict Pell Grant eligibility that more than 1 million low- and middle-income students would no longer be able to count on them to help pay for college.57 Cuts to these grants would be devastating to the 41,454 Nevada students who depend upon them to further their education. The average Pell Grant to Nevada students under the Romney-Ryan plan would be cut by about $810 a year.

Gov. Romney gave his answer to student’s needing money earlier this year during an appearance at Otterbein University, when he advised cash-strapped students to “borrow money if you have to from your parents.” He followed up this recommendation by recounting a story about a friend who borrowed $20,000 from his parents, not an opportunity most young people have. If not realistic, this advice is not entirely surprising, given that Gov. Romney paid for college by selling stock options given to him by his CEO father.

Seniors in Nevada would lose health care benefits and pay more

Gov. Romney and Rep. Ryan plan to convert our nation’s Medicare program into a voucher system for people who are under 55 years of age. It is that simple. Their candidacy has become infamous for its startling determination to lie about President Obama’s plans for Medicare and the true nature of their own plan for the vital program. Under their plan, seniors beginning in 2023 would receive vouchers to purchase health insurance from either private insurance companies or from traditional Medicare. If premiums for traditional Medicare or the private plan they choose cost more than the voucher amount, then seniors would have to pay the difference themselves.

Gov. Romney and Rep. Ryan claim that no one over 55 will be affected by their plan to turn Medicare into a voucher. But that’s simply not true. The reason: Seniors across our country are already benefiting from changes to Medicare because of Obamacare.

In Nevada, more than 113,000 seniors who rely on their Medicare benefits receive one or more preventive services—such as cancer screenings, diabetes testing, and bone density scans—free of charge through their Medicare plan. This is saving Nevada seniors money each year and also providing them with the care needed to protect their health.

What’s more, Gov. Romney and Rep. Ryan would open up the prescription drug donut hole that Obamacare is closing. Since the law was enacted, Nevada seniors have saved $24.4 million on prescription drug costs because Obamacare is closing the loophole. In 2012 alone, more than 8,000 Nevada seniors and people with disabilities saved $24.4 million. While they each have saved an average of $590 this year, Gov. Romney and Rep. Ryan would force them to once again pay for this out of pocket.

Because of the increased drug costs and higher Medicare premiums, the Romney-Ryan voucher plan would raise health care costs for current seniors by $11,000 for the average person who is 65 years old today. And it’s even worse for the future seniors. Because of cost shifting and increases in systemwide health care costs, Medicare costs for future seniors who become eligible for Medicare after 2022 will increase dramatically under the Romney-Ryan plan. Specifically, upon retirement:

• Today’s 54 year old will have to pay increased Medicare costs of $59,450
• Today’s 49 year old will have to pay $124,626 more
• Today’s 39 year old will have to pay $216,631 more
• Today’s 29 year old will have to save $331,170 more

These estimates are conservative because we examined the least radical of the various Romney-Ryan proposals to calculate our estimates. Had we instead used the budget plan authored by Rep. Ryan for the House of Representatives in 2011, the nonpartisan Congressional Budget Office estimates it would result in increased costs that are much greater, forcing current seniors to pay $6,400 more per year for their health care costs.

Women in Nevada would pay more for health care but receive less bang for their buck

Make no mistake, whether we’re talking about women’s health or reproductive rights, Gov. Romney and Rep. Ryan want to take women backward. Women’s health has been under constant siege since Republicans overtook the House of Representatives and some additional state governments in the 2010 midterm elections.

Indeed, the Republican record includes the all-male U.S. congressional panel debating insurance coverage for contraception, 33 attempts to repeal the health reform law and all of its benefits for women, vaginal probes in Virginia and elsewhere, and efforts to defund Planned Parenthood clinics around the country. Gov. Romney and Rep. Ryan even endorse the radical “personhood” measures that would outlaw abortion in all circumstances and could potentially ban common forms of birth control and in-vitro fertilization. Fortunately, Nevadans are not at all enamored with this position—a group attempting to put a personhood measure on the ballot in Nevada this year failed to collect the minimum number of signatures needed to do so.

Yet Gov. Romney and Rep. Ryan want to launch a more broadly insidious campaign against women’s health. If elected president, Gov. Romney promises to repeal the Affordable Care Act “on day one” of his presidency. Why is Obamacare so important to women’s health? Due largely to the high cost of health insurance coverage—especially for women without access to employer-based coverage—19 million American women between the ages of 18 and 64 were uninsured in 2011, including 199,300 women.

Even if insured, women tend to have higher out-of-pocket costs than men. Women of reproductive age spend 68 percent more than men on health care expenses. And more than half of American women report delaying needed medical care because of cost, while one-third of women report giving up basic necessities such as food, heat, or rent to pay for health care expenses. In 2014 the health care law will prohibit insurance companies from their practice of routinely denying women coverage for gender-related pre-existing conditions such as breast cancer, a Cesarean section, domestic violence, or sexual assault. And Obamacare has already prohibited insurance companies from continuing to deny coverage to the 35,600 Nevada children who have a pre-existing condition.

Obamacare also makes health care more affordable by guaranteeing no-cost coverage for recommended preventive services such as mammograms, Pap smears, well-baby care, contraception, gestational diabetes screening, lactation supports, and much more. Approximately 47 million women will have access to women’s preventive services without cost-sharing under the Affordable Care Act, including nearly 400,000 women in Nevada.

Women without employer-based insurance coverage have it particularly hard in the so-called individual health insurance market, which discriminates against women in numerous ways and which Gov. Romney and Rep. Ryan want to maintain. Women are often charged much more for their health insurance coverage solely because of their gender, a practice known as gender rating. In fact, women currently pay $1 billion more than men each year in health insurance premiums in the individual market for the same benefit. Because Nevada law does not prohibit or limit insurers from charging women more, if Gov. Romney and Rep. Ryan succeed in repealing the health care law, women would once again face higher costs simply because of their gender.

Young adults in Nevada would lose access to their families’ health insurance

The Millennial generation of Americans born in the late 1970s and early 1980s also face staggering costs and loss of care from the Romney-Ryan plan for health care. Gov. Romney’s promise to dismantle Obamacare would result in 33,000 young adults in Nevada losing the access they have today to their families’ health insurance due to the Affordable Care Act. And because of the Romney-Ryan plan to turn Medicare into a voucher program, today’s average 29 year old will have to save $331,200 more to afford their health care upon retirement under the Romney-Ryan plan.

Conclusion

The 2012 presidential election offers two contrasting visions of how our country should work. President Obama and Vice President Biden seek to restore the shared prosperity that once defined the growth of our nation’s middle class while Gov. Romney and Rep. Ryan want to return to the trickle-down economic policies of the Bush era, which led inexorably to the Great Recession.

The contrast is clear. It’s no exaggeration to say the future growth and prosperity of Nevada’s middle class is at stake. The decision made in this election will determine the strength of the state’s middle class and the course our country takes not just over the next two or four years but for decades to come.

President Obama and Vice President Biden are clear in their plans to restore shared prosperity. Gov. Romney and Rep. Ryan are much less open about their policy intentions, yet as this brief demonstrates, what they have unveiled enables us to examine the consequences in telling detail. In Nevada and across our nation, low-income and middle-class Americans would sacrifice for the greater benefit of the wealthiest under the Romney-Ryan plan for the economy, taxes, and health care. In contrast, the Obama-Biden plan asks for shared sacrifice and shared prosperity that is necessary to grow our middle class and preserve our global economic competitiveness well into the 21st century.

Methodology

In order to estimate the effect of the spending plans of Republican presidential and vice presidential contenders Gov. Mitt Romney (R-MA) and Rep. Paul Ryan (R-WI) on federal funding for states, we begin by estimating the percentage cut in overall spending that would be required given their stated spending proposals. For federal spending they propose to:

• Cap all federal spending at 20 percent of gross domestic product
• Increase defense spending to 4 percent of gross domestic product
• Make no cuts to Medicare or Social Security in the next 10 years
• Repeal the Affordable Care Act, including the Medicare savings, which would increase Medicare spending by more than $700 billion
• Transform Medicaid into block grants to the states

In order to comply with the Romney-Ryan spending cap after accounting for the spending effects of the other policy proposals, the former Massachusetts governor and House Budget Committee chairman would need to cut all other federal spending—that is spending aside from Social Security, Medicare, Medicaid, defense, and net interest—by about 11 percent in 2013, growing to 63 percent by 2022, for an annual average of 39 percent over the next 10 years. These calculations rely on the following assumptions:

• The Romney-Ryan plan would reduce federal spending to fully comply with their proposed spending cap by the end of 2016.
• From 2013 through 2015 their plan would reduce overall federal spending to levels consistent with the House Republican budget plan, authored by Rep. Ryan.
• The Romney-Ryan plan to turn Medicaid into a block grant will be roughly consistent with Rep. Paul Ryan’s plan as detailed in his most recent budget plan.
• The baseline, against which the percentage cuts are calculated, includes a permanent fix to the Medicare Sustainable Growth Rate formula, a repeal of the “sequester” automatic spending cuts, and the drawdown of U.S. military forces in overseas combat operations.

In order to estimate how these cuts would specifically impact states, we started with U.S. Census Bureau data on federal aid to states in fiscal year 2010—the most recent year available. We then extrapolated fiscal year 2013 through 2022 funding by using the most recent Congressional Budget Office baseline estimates. For mandatory grants we used CBO’s spending growth projections specific to those particular programs. For discretionary grants we used the general growth projections for nondefense discretionary spending.

Since nearly all federal grants to states, with the notable exception of Medicaid, fall into the “other federal spending” category, we applied the annual percentage cut required to comply with the Romney-Ryan plan’s proposed cap to the baseline projections of all non-Medicaid grants. But since their plan has a separate policy for Medicaid, we did not apply the “across-the-board” percentage cut to that program. Instead, for Medicaid, we applied the annual percentage cut that would occur under the “block grant” proposal from Rep. Ryan that is broadly similar to Gov. Romney’s outlined proposal. This cut also includes the effect of repealing the Affordable Care Act.