Newt Gets Dynamic
Overlooked because of the buzz about Republican presidential candidate Mitt Romney's new 20% income tax cut plan was the latest splash out of rival Newt Gingrich's economic policy shop.
Mr. Gingrich has announced he will use dynamic, not static, scoring to demonstrate his plan's potential to jumpstart growth. The former House speaker arguably has the boldest tax plan, which includes a 15% optional flat tax. He would also allow young workers to take a share of their payroll tax dollars and divert the funds into a personal IRA.
These plans have come under attack from liberal groups like the Center on Budget and Policy Priorities and even from some of Mr. Gingrich's fellow Republicans. On Thursday Mr. Gingrich showed that using this dynamic scoring -- which takes into account the extra economic steroid effect of the plan -- there would be six million new jobs in two years.
The new economic numbers, from former Reagan economists Peter Ferrara and Gary Robbins, also show that the Gingrich policies would balance the budget within the first term of his presidency.
In an interview, Mr. Gingrich said that "we make the most serious cuts in entitlements of any of the candidates." He's embraced many of the Paul Ryan entitlement reforms and calls for a sweeping devolution of the welfare programs to the states. Mr. Gingrich stressed "the crucial role that growth plays in balancing the budget. We figured that out when I was speaker."
His plan calls for the "elimination of the capital gains tax and death tax, deregulation and sound monetary policy," as well as for rolling back the "regulatory barriers to energy production [and] unleashing the private sector to maximize all forms of American energy production."
There's no doubt Newt is the real supply-sider in this race," said Mr. Ferrara. "And now we have evidence the numbers actually add up." Exciting stuff, but whether that's enough to jump start a candidate who was briefly a front-runner but has slid into the teens in recent polling is yet to be seen.
-- Stephen Moore
THE WALL STREET JOURNAL POLITICAL DIARY ONLINE
Friday, 24 February 12