Washington (CNN) - Republican presidential candidate Mitt Romney outlined his plan to shrink the size of government Friday, promising to cut spending levels to 20% of GDP by the end of his first term.
To reach that goal, Romney said, the government must find $500 billion in annual savings by 2016.
Speaking in Washington at the "Defending the American Dream Summit," a conference sponsored by the conservative group Americans for Prosperity," the former Massachusetts governor outlined a three-step plan for scaling back federal costs while also maintaining a robust commitment to military spending.
"I will make the federal government simpler, smaller, and smarter by eliminating programs, by sending programs back to the states, and by making government itself more productive," Romney said.
Romney won applause by pledging to slice funding to a litany of conservative bogeymen that receive federal funds, outfits like the National Endowment for the Arts, Amtrak and Planned Parenthood.
The biggest cost-saver under his plan would be a proposal to let individual states manage Medicaid and limit the program's growth to the consumer price index, plus one percent.
That would save the government $100 billion a year, Romney said.
Enabling states to handle workforce training dollars would save "billions of dollars," he added.
Romney's other proposals included:
– Re-structuring Social Security and Medicare, including letting seniors choose between federal coverage and private health insurance plans
– Reducing foreign aid to countries that don't need it and countries "that oppose American interests."
– Cutting the size of the federal workforce and linking government salaries to private sector salaries
– Combining wasteful government agencies
Democrats attacked Romney's plan earlier in the day.
A memo released by President Barack Obama's re-election campaign Friday said the Romney plan would destroy Medicare and Medicaid, enact cuts that would hurt the middle class and provide tax breaks to corporations.
"He would return American families to the failed economic policies that contributed to the years of rising inequality, stagnant wages, and eroding middle-class security," the memo said.
In a web video, the Democratic National Committee said the plan by the GOP presidential candidate would seriously hurt middle class families, saying the plan was something "only a billionaire could love."