Romney’s litmus test for federal programs: Is it worth a Chinese loan?

In his 60 Minutes interview on Sunday night, Mitt Romney offered an interesting response to Scott Pelley’s question about what sacrifices he would ask the American people to make in his effort to balance the budget. He argued that those sacrifices would depend on the extent to which he is willing to go hat in hand to China, the largest foreign holder of U.S. debt. 

I’m going to look at every federal program and I’ll ask this question, "Is this so — program so critical it’s worth borrowing money from China to pay for it?" And if it doesn’t pass that test, I’m going to eliminate the program because we just can’t afford to keep spending more money than we take in. This is, this is something which is not just bad economics. I think it’s immoral.

Romney didn’t specify exactly how he’d determine whether a federal program passes the China sniff test, but the line, which the Republican candidate hasn’t used much yet on the campaign trail, is attractive for several reasons. For one thing, it draws a straight line between two top issues for Republicans: the swelling national debt and a perceived loss of America’s geopolitical power. As Paul Ryan declared during a PowerPoint presentation on the debt over the weekend, "We are now relying on other governments to basically cash-flow our government. And when you rely on other countries to lend you their money to run your country, you lose your sovereignty."

The line also plays into Romney’s larger argument that Obama has been weak on China and failed to stop Beijing from "cheating" by manipulating its currency and engaging in unfair trade practices — an argument the campaign hopes will play well in swing states like Ohio, which depends on the auto industry (during a campaign stop in Ohio last week, Obama announced a WTO complaint against China over its subsidies for exports of cars and auto parts).

In the latest installment of the Obama-Romney ad wars on China, the Romney campaign released an ad today accusing China of "stealing American ideas and technology" and Obama of failing to take action against Beijing (Obama has filed several trade cases against China, though he’s never labeled the country a currency manipulator) — just as Romney and Ryan begin a bus tour in Ohio (the Obama campaign retorted that Romney’s 2011 tax returns included Chinese investments).

Given that Romney has repeatedly called the Chinese cheaters and pledged to label Beijing a currency manipulator on his first day in office, I’m getting the sense that federal programs would have to have a whole lot going for them to pass Romney’s litmus test for balancing the budget.