A decade ago, Paul Ryan, who was then a member of the House Budget Committee, introduced a tax-and-spending bill called the Roadmap for America’s Future Act of 2008. With the Democrats in control of the Senate, there was no immediate prospect of the bill being put into law. Rather, it was a political manifesto, which Ryan updated in 2010. The original version contained all the essentials of Ryan’s brand of fiscal conservatism. It began in this way:
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The social insurance strategies of the past century, which sprang from the New Deal, expanded in the Great Society, and continue to dominate the terms of public debate, are headed toward collapse . . . Among the inescapable signs are the following: an unsustainable path of Government spending; levels of projected debt that threaten to bankrupt the country; trillions of dollars of unfunded liabilities in the Government’s major benefit programs; and the erosion of Americans’ security and confidence in health care and retirement . . . A comprehensive plan is needed, and this legislation aims to energize the productive capacities of Americans to generate sustained economic growth.
The bill went on to outline a series of proposals to reduce entitlement spending by cutting future increases in Social Security payments and introducing personal investment accounts into the public retirement system, converting Medicare to a competitive “premium subsidy” model, and transforming Medicaid into a state-level program supported by federal block grants. On the revenue side, the bill proposed a personal flat tax and the replacement of the corporate income tax with a value-added tax on consumer spending. While these measures alone wouldn’t balance the budget in the short term, Ryan claimed that, over time, they would lead to a substantial decline in the national debt as a percentage of G.D.P.
In the wake of Ryan’s announcement on Wednesday that he intends to retire from the House of Representatives at the end of this year, a number of economic commentators pointed out that his grand plans came to naught. At Bloomberg View, Justin Fox noted that the nation’s debt-to-G.D.P. ratio has risen sharply over the past twenty years, and the budget deficit is now close to five per cent of G.D.P. even though the unemployment rate is just 4.1 per cent. At Politico, Michael Grunwald pointed out that Ryan, despite his talk about reducing the debt, consistently supported tax cuts and spending bills that raised the deficit. (In 2020, the excess of spending over revenue is projected to top a trillion dollars and stay there for the indefinite future, according to a new Congressional Budget Office report.) These huge deficits will be Ryan’s “greatest legacy,” Grunwald argued.
That is true. As Paul Krugman pointed out back in 2010, Ryan is a flimflam man: his arithmetic has never added up. But what hasn’t been emphasized enough is that Ryan wasn’t merely a purveyor of snake oil and a front man for the conservative billionaires and other wealthy interests whose money has flooded the Republican Party in recent years. He was also a failure on his own terms.
To all appearances, at least, Ryan genuinely believes that the growth of spending on the social safety net presents an existential threat to the United States. In his press conference on Wednesday, he again singled out entitlement reform as the area where “more work needs to be done.” He also praised himself for “normalizing” the idea of entitlement reform.
But this patting of his own back was unjustified. Far from making entitlement reform more likely, Ryan’s actions, particularly his championing of the recent Republican tax bill, have rendered the entire subject utterly toxic for the foreseeable future. With Congress and the Trump Administration having just handed out huge tax cuts to wealthy people and major corporations, there is now no prospect whatsoever of the general public or the Democratic Party acceding to benefit cuts for middle- and low-income retirees. (Even Donald Trump might well balk at the idea.)
To be sure, some Republicans like Ryan, with the support of some conservative economists, are still calling for big entitlement cuts, citing the rising national debt as their justification. But even they surely know that this abominable argument won’t work politically. According to the new C.B.O. report, the G.O.P. tax bill will add $1.9 trillion to the debt over the next ten years. Every time a Republican tries to bring up the debt or reforming Social Security and Medicare, this figure will be thrown in their faces, and rightly so.
Ryan’s failure on his own terms doesn’t end there. In the U.S. system of government, the only realistic way to reform programs on the scale of Social Security or Medicare is by doing so on a bipartisan basis. That’s what happened in 1982 and 1983, when Ronald Reagan appointed a bipartisan commission, led by Alan Greenspan, to tackle the looming insolvency of the Social Security system, and Congress enacted a series of unpopular measures, including raising the retirement age and payroll taxes.
In 2010, President Barack Obama created another bipartisan body and tasked it with identifying policies that would shore up the nation’s finances over the long run: the National Commission on Fiscal Responsibility and Reform, which was led by Alan Simpson, a Republican, and Erskine Bowles, a Democrat. It is sometimes forgotten now, but Ryan was a member of this commission. In its final report, which came out in December, 2010, it recommended cutting federal spending by about two trillion dollars over ten years; raising about a trillion dollars in new tax revenues; and making further reforms to Social Security, including raising the retirement age again and cutting back future benefit increases for medium- and high-income workers.
Although it didn’t go as far as Ryan’s “Roadmap,” it reflected the view that rising debt levels were a critical threat, that entitlements were at the root of the matter, and that corporate tax rates were too high. For years, Ryan had been making these very arguments. But, instead of supporting the Simpson-Bowles plan, he distanced himself from it. In March, 2012, he voted against a bipartisan bill in the House that incorporated many of its recommendations.
The bipartisan effort to reform entitlements petered out, and today it is hard to see how it could ever be resurrected. Indeed, the next move on entitlements may well be a big expansion. If the Democrats take control of Congress this fall, calls within the Party for some form of Medicare-for-all policy will increase, and whoever becomes the Democratic candidate for President in 2020 will likely also be pressured to endorse such a proposal.
By then, Ryan will be long gone from Congress. In promoting highly dubious fiscal plans, turning his back on bipartisan initiatives, enabling Trump, and championing a costly and inequitable tax-reform bill, he let down the country. But he failed by his own lights, too.
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barmar, on 2018-April-11, 09:24, said:
