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Campaign 2012

A Gingrich Administration Could Be Expensive

Some of the GOP candidate's big plans have big price tags.

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Republican presidential candidate, former House Speaker Newt Gingrich, accompanied by his wife Callista, visit a polling place at Celebration Heritage Hall in Celebration, Fla.,, Tuesday, Jan. 31, 2012.(AP Photo/Matt Rourke)

Newt Gingrich has branded himself a visionary politician since his days in Congress and prides himself on his grand—some would say even grandiose—ideas for transforming the nation. That propensity to think big extends to all parts of his presidential platform, from tax reform to the space race, and occasionally puts him at odds with his party’s resolve to slash government spending. We take a look at some of the former House speaker’s most ambitious ideas – including two-track tax and Social Security systems --- and how much they would cost. From least expensive to most:

IMMIGRATION: Newt Gingrich’s proposal to deal with the 11 million undocumented immigrants in the country calls for a new system of citizen panels that would decide whether certain illegal immigrants who have deep ties to the United States could be granted legal status (but not citizenship). Gingrich says he would charge Congress with setting clear, objective legal standards for the proceedings and task the Department of Justice with setting up the process itself. Although details of the proposal remain murky, experts agree that it would require the creation of a massive new bureaucracy and a significant investment of time and resources (such as training volunteers and space for the panels to conduct their meetings).

 

Gingrich has likened these citizen panels to the World War II-era draft boards set up under the Selective Service System. That agency, still in existence, has an annual budget of $24.2 million. In 1944, however, during the height of the draft and when the community boards were in full swing, Selective Service had a budget of $61.2 million a year, or more than $850 million in today's dollars.

MOON BASE: Newt Gingrich’s vow to build a permanent moon base by the end of his hypothetical second term as president has earned him ridicule from his opponents, and kudos from fellow space enthusiasts (yes, there is indeed a Tea Party in Space). Gingrich has said he would only use 10 percent of NASA’s total budget to create prizes and other incentives to spur private-sector space innovation. That would amount to about $1.8 billion a year of taxpayer dollars if the NASA budget remained at its current levels. What’s the total sticker price of a base on the moon? Estimates have ranged over the years. Then-NASA administrator Michael Griffin said in late 2006 that it would cost $104 billion to establish the lunar outpost, but that didn’t include the cost of maintaining and staffing the base continuously. The Bush administration put the price tag at around $230 billion when it toyed with the idea of a permanent presence on the moon, before the program was ultimately shelved.

TAX REFORM: Gingrich has proposed giving taxpayers a choice: They could keep paying under the current structure or pay a flat rate of 15 percent. The corporate rate would plummet from 35 percent to 12.5 percent. There would be no tax on capital gains, dividends or interest income. Gingrich would keep just a few deductions and credits, among them the mortgage interest and charitable gift deductions and the earned income and child tax credits. The Tax Policy Center estimates that Gingrich’s proposal would add an average $1 trillion a year to the federal deficit. “We are used to seeing numbers such as this describing the 10-year revenue loss of some tax plan” – not one year, writes the center’s Howard Gleckman, describing the sticker shock Gingrich’s plan could induce. Gingrich and his advisers say economic growth and spending cuts would keep the deficit down.

 

SOCIAL SECURITY: Gingrich wants to bring a version of the Chilean retirement system to the United States. He would create a “voluntary option for younger Americans to put a portion of their Social Security contributions into personal Social Security savings accounts” run by investment firms. There are at least two huge possible costs associated with such a plan.

As in Chile, the government would guarantee that “all workers with personal accounts will receive at least as much in retirement as they would under the current Social Security system.” So if a personal account lost money or didn’t yield as much as a government account, the U.S. Treasury would make up the difference. A Social Security actuarial analysis of a similar plan in 2005 found that the guarantee could add $2 trillion to the federal debt.  Gingrich says that in three decades, the Chilean government has not had to shell out any money for the guarantee.

Second, since benefits to current retirees are financed by payroll taxes paid by younger workers, the government would have to fill the gap left when some of those workers put money into private accounts instead of into the government Social Security pool. The actuarial analysis in 2005 estimated that gap at $1.4 trillion to $2.2 trillion over 10 years. The Gingrich plan says transition funding “can all be more than covered” by cuts he proposes to dozens of social welfare programs.

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