10/23/2012 02:18 pm ET

Larry Summers: Mitt Romney's Budget Plan Is 'Alchemy'

Larry Summers, a former top economic adviser to President Barack Obama who helped craft the government's response to the economic crisis, says that Mitt Romney's budget plan doesn't square with reality.

Romney said at the third presidential debate on Monday that his budget plan would bring "a balanced budget within eight to 10 years."

But Summers, a Harvard economist, told The Huffington Post on Tuesday that Romney's budget math doesn't add up. "This is alchemy," he said.

"Lead cannot be turned into gold. Two plus two cannot equal five," Summers said. "And 20 percent across-the-board tax cuts cannot be squared with balanced budgets without raising middle-class taxes or eviscerating government."

Summers said he believes that Romney's budget plan would likely mean "starving research that might find a cure for breast cancer, stopping efforts to help disadvantaged kids ... reducing efforts to prevent financial fraud, and ... rendering government unable to perform functions it has performed throughout our lifetimes."

Summers, who served as Treasury secretary under President Bill Clinton, is considered to be a possible nominee for Federal Reserve chairman if Obama is reelected, according to The New York Times. Summers declined to comment to HuffPost about the issue.

Romney has proposed tax cuts including cutting marginal tax rates by 20 percent and slashing taxes on investment income. The tax cuts would total $5 trillion over the next decade, according to the Tax Policy Center, a nonpartisan, nonprofit think tank based in Washington, D.C.

A number of economists and journalists have said Romney's tax plan doesn't add up. An analysis by the Tax Policy Center found that Romney's tax plan would have to either increase the deficit or raise taxes on the middle class in order to pay for his proposed tax cuts. Romney has promised that he will not increase middle-class taxes and that his tax plan will not increase the deficit.

In response to Summers' statements, a Romney spokesperson referenced two blog posts available on the Romney campaign website -- one on cutting government spending and another on Romney's tax plan.

In a recent paper, Princeton economist Harvey Rosen found it is possible for Romney's tax plan to not increase the deficit and not raise taxes on the middle class -- if there is sufficient income growth.

During the second presidential debate last week, Romney said that he plans to "simplify the tax code" and "get middle-income taxpayers to have lower taxes," while ensuring that the richest taxpayers continue to pay the same share of federal income taxes as before.

Nonetheless, Romney's current tax plan seems to favor the wealthy, according to the Tax Policy Center. Under his plan, families in the top 0.1 percent would receive an average tax cut of $725,716, while families in the middle fifth would receive an average tax cut of just $810, according to the Tax Policy Center.

Romney already has proposed dramatically slashing government spending. On his website, he promises to cut government spending by roughly one-fifth by the end of his first term. But Romney has failed to specify which programs he would cut.



People Who Say Romney's Tax Plan Doesn't Work