Paul Ryan has called himself “the Paul Revere of fiscal problems.” This past Monday he galloped off to Chicago, Obama’s home town, to warn, not that the British were coming, but that a more serious threat was coming – a debt and spending crisis that could change the American way of life permanently.
Selling that message to the American people will not be easy. The political elites on the Left believe the role of government is to direct people’s lives, limit their freedom, increase their dependency, and of course, reelect the elites so they can continue to create an American nomenklatura. Unsurprisingly, Democrats have turned up the volume on their obfuscation message machine to confuse and frighten people about the Ryan debt plan, especially his proposals to make entitlements more responsible.
Polls show, however, that the Democrat demagoguery isn’t working too well, especially their “Mediscare” campaign. According to Gallup polling, Ryan’s plan is more accepted than Obama’s debt reduction plan in every age group except the young. In fact, support for the Ryan plan increases with each older age group to the point that it is supported by almost half the seniors (48%) compared to Obama’s plan (42%) even though Ryan proposes to change Medicare essentially into a voucher system. Obama proposes to do nothing to Medicare – except let it go broke.
A separate Kaiser Family Foundation survey found that a majority of the public (54%) supports Ryan's plan to convert Medicare into a voucher program when it's accurately described as a way to "reduce the deficit and let seniors choose plans based on cost and quality."
Ryan has enlisted the help of House allies in the Republican caucus to fan out into the hustings and help explain the plan. One of Ryan’s warriors is freshman representative Tim Meehan, elected in a swing district not far from Valley Forge. Speaking at a retirement village last week, Meehan concluded his presentation to a group of seniors Democrats love to scare, saying, “You have a congressman from Wisconsin who is showing more leadership and direction than the president of the United States. That is a sad commentary on the moment.”
It came as a shock, then, when none other than Mr. Conservative, Newt Gingrich, sounded off on Sunday’s “Meet the Press” program, calling the Ryan plan “right-wing social engineering” and “radical change from the right." A measure of the support Ryan’s plan enjoys was revealed in the ensuing uproar when conservative pundits and talk show hosts rose in high dudgeon to condemn Gingrich’s remarks. Conservative talk show host, Bill Bennett, obsessed throughout his Monday morning show over the former speaker’s remarks, calling them “an unforgivable mistake” and effectively removing Gingrich from “serious consideration” in 2012. On Tuesday’s show, Bennett was still peeved about Gingrich’s apostasy and invited Gingrich to give an account of himself. Gingrich did himself no favors, denying having said certain things until Bennett played audio clips for him – but that’s another story for another time.
Suffice it to say the House of Representatives passed the Ryan plan a month ago by a vote of 235 to 193 with every Democrat voting "no." The Democrat scare machine went to work, causing some Republicans in tight 2012 House races to get sweaty palms. But current House Speaker John Boehner continues to deny that Republicans are “running away” from the Ryan plan. “That’s just not a fact,” he told Face the Nation recently. “You can ask any one of our members, and they’ll tell you that on average, 80% of the people at these town-hall meetings were supportive of taking big steps to put our fiscal house in order.”
There is no denying that it’s the GOP which is leading the debate on how to get the country’s fiscal future back on track, which the Obama administration derailed with some help from George Bush. Meanwhile, the Democrats have now gone nearly 750 days without passing a budget in the Senate, which they control. Ryan’s spokesman Conor Sweeney told the National Review that “Republicans agree we need to fix our fiscal mess, whereas Democrats can’t even agree that the government needs a budget.”
Ryan continues to present his plan as a sharp contrast to the plan Obama has put forward. And this Monday, Ryan went to great lengths and with great effect to do just that in his speech to the Economic Club of Chicago.
Here are the highlights of his remarks.
The budget debate, Ryan said, has become a “game of green eyeshade arithmetic” in which the government elites – including Obama – insist that temporary spending restraints must be traded for permanent tax increases. This sets up the debate to be little more than an argument over who to hurt and how to manage the decline of our nation. So, higher taxes and rationed healthcare become givens when certain entitlements and spending are declared off-limits for reform. Ryan calls this a “shared scarcity” mentality. It is Obama’s vision of America’s future. To quote Ryan:
In a recent speech he gave in response to our [the Ryan] budget, President Obama outlined a deficit-reduction approach that, in my view, defines shared scarcity. The President’s plan begins with trillions of dollars in higher taxes, and it relies on a plan to control costs in Medicare that would give a board of 15 unelected bureaucrats in Washington the power to deeply ration care. This would disrupt the lives of those currently in retirement and lead to waiting lists for today’s seniors.
Shared scarcity represents a deeply pessimistic vision for the future of this country – one in which we all pay more and we all get less. I believe it would leave us with a nation that is less prosperous and less free.
The missing ingredient in a “shared scarcity” mindset is economic growth. Shared scarcity fails to consider all of the strategies which ought to be deployed to provide incentives for economic growth. It chases ever-increasing spending with ever-increasing taxes, which, in Ryan’s view, reduces the number of “makers” in American society and expands the number of “takers.” The incentives for hard work and risk taking are therefore eliminated, creating a society of discouraged, complacent, and dependent citizens.
Those committed to the mindset of shared scarcity, Ryan said, are telling future generations, “Sorry, you’re just going to have to make do with less. Your taxes will go up, because Washington can’t get government spending down.” They are telling future generations, “You know, there’s just not much we can do about healthcare costs. Government spending on healthcare is going to keep going up and up and up… and when we can’t borrow or tax another dollar, we’ll have to give a board of unelected bureaucrats the power to tell you what kind of treatments you can and can’t receive.”
In contrast to Obama’s pessimistic proposal for spreading the pain around, Ryan proposes four commonsense pillars to restore economic growth in this country and to step back from the spending abyss which the Bush and Obama administrations pushed the country toward.
Ryan’s first pillar for economic growth is for government to stop spending money it doesn’t have which is forcing it to borrow at unprecedented levels. He noted that the rating agency S&P recently downgraded the outlook on US debt from “stable” to “negative.” That sends a bad signal to growth creators. If S&P is telling business that America is a bad investment, they’re not going to expand and create jobs in America – not at the rate we need them to. More debt means more uncertainty, and more uncertainty means fewer jobs.
Averting a debt crisis ultimately means getting healthcare costs under control. The House-passed Ryan budget gets healthcare spending under control by empowering Americans to fight back against skyrocketing costs. The Ryan budget makes no changes for those in or near retirement, and offers future generations a stronger voucher-based Medicare program that they can depend on to guarantee coverage – a plan that provides less help for the wealthy and more help for the poor and the sick.
There is widespread bipartisan agreement, Ryan noted, that the open-ended, fee-for-service structure of Medicare is a key driver of healthcare cost inflation. His disagreement with Obama isn’t about the problem; it’s about the solution for controlling costs in Medicare:
If I could sum up that disagreement in a couple of sentences, I would say this: Our plan is to give seniors the power to deny business to inefficient providers. Their plan [Obama’s] is to give government the power to deny care to seniors.
Ryan reaffirmed the Republicans’ commitment to repeal ObamaCare and its burdensome maze of new regulations. Not only does ObamaCare impose an unconstitutional mandate on every American; it also imposes new regulations on businesses which are stifling job creation.
Let me share with you a figure that serves as a devastating indictment of the new healthcare law: So far, over 1,000 businesses and organizations have been granted waivers from the law’s onerous mandates. These waivers may prevent job losses now, but they do not guarantee relief in the future, nor do they help those firms that lack the connections to lobby for waivers.
What Ryan failed to mention is that 20% of the most recent batch of 204 waivers were given to businesses in Nancy Pelosi’s district.
Ryan’s second pillar for economic growth was the restoration of common sense to the regulatory environment. Regulations should be fair, unintrusive, and should not cause uncertainty as to their impact on America’s employers. Ryan would dismantle the growing scourge of crony capitalism, in which Washington bureaucrats abuse the regulatory process to pick winners and losers in the private economy. The NLRB and the FCC come to mind.
Congressional Republicans continue to advance reforms that stop regulatory bureaucrats from strangling job growth and innovation with red tape. We’ve advanced legislation to stop the EPA from imposing job-destroying energy caps on American businesses. We’ve advanced legislation to revisit the flawed Dodd-Frank law, which actually intensifies the problem of too-big-to-fail by giving large, interconnected financial institutions advantages that small firms do not enjoy.
Ryan’s third pillar recognizes that the economy can’t get back on track if Obama gets his way in trying to tax the country back into prosperity. Prosperity requires low tax rates and a tax policy that doesn’t change year by year, thereby creating so much uncertainty that businesses have no incentive to invest capital to create jobs. Even non-economists understand that high marginal tax rates are a drag on the economy and growth.
As the University of Chicago’s John Cochrane recently wrote, “No country ever solved a debt problem by raising tax rates. Countries that solved debt problems grew, so that reasonable tax rates times much higher income produced lots of tax revenue. Countries that did not grow inflated or defaulted.”
Ryan acknowledged that his plan is in fundamental disagreement with Obama and the Democrats regarding tax reform. A simpler, fairer tax code is needed because individuals, families, and employers now spend over six billion hours and over $160 billion per year figuring out how to pay their taxes. The tangle of special interest credits and deductions that currently exist must be eliminated in order to lower tax rates and promote growth. The Ryan budget that passed in the House does that by making the tax code “simpler… flatter… fairer… more globally competitive… and less burdensome for working families and small businesses.”
In contrast Obama says he also wants to eliminate deductions, but at the same time he wants to raise tax rates. That includes raising the top rate to a whopping 44.8%., which would amount to a $1.5 trillion tax increase on families and job creators. As always, Obama says that only the richest people in America would be affected by his plan. “Class warfare may be clever politics,” Ryan said, “but it is terrible economics. Redistributing wealth never creates more of it.”
The fourth and final pillar of the Ryan plan calls for rules-based monetary policy to protect working families and seniors from the threat of high inflation. It would restrict the current Janus-headed Federal Reserve to a focus on price stability only and get it out of its full employment role. The Fed, like most government agencies has extended its tentacles like kudzu, intruding ever more into the private sector, and most recently used monetary stimulus to bail out the failures of Washington politicians.
Families and businesses rely on a sound money policy, and the Fed will have its hands full if it sticks to that one goal alone. However, the Fed’s recent waywardness from rules-based monetary policy has increased economic uncertainty and caused its critics to call for eliminating the Fed. The Federal Reserve was intended to be an independent agency, not a political arm of the White House. It should explicitly publish and follow a monetary rule as its means to achieve its sound money goal.
We can’t achieve this goal by simply rubber-stamping increases in the national debt limit without reducing spending in Washington. Ryan noted:
Speaker Boehner made this clear in a recent speech at the Economic Club of New York: If the debt ceiling has to be raised, then we’ve got to cut spending. The House-passed budget contained $6.2 trillion in spending cuts. For every dollar the President wants to raise the debt ceiling, we can show him plenty of ways to cut far more than a dollar of spending. Given the magnitude of our debt burden, the size of the spending cuts should exceed the size of the President’s debt limit increase.
In concluding, Ryan told his Chicago audience that the country faces a choice between two futures. It can continue to go down the path toward shared scarcity – the path that the Obama administration has put the country on – or it can choose the Path to Prosperity – the name for the Ryan plan.
Ryan closed by recalling a statement by his mentor, the late Jack Kemp, who in 1979 gave this rationale for the only real choice America has:
We can’t progress as a society by using government to diminish one another. The only way we can all have more is by producing more, not by bickering over how to share less. Economic growth must come first… for when it does many social problems tend to take care of themselves, and the problems that remain become manageable.
Amen, Jack Kemp.
Selling that message to the American people will not be easy. The political elites on the Left believe the role of government is to direct people’s lives, limit their freedom, increase their dependency, and of course, reelect the elites so they can continue to create an American nomenklatura. Unsurprisingly, Democrats have turned up the volume on their obfuscation message machine to confuse and frighten people about the Ryan debt plan, especially his proposals to make entitlements more responsible.
Polls show, however, that the Democrat demagoguery isn’t working too well, especially their “Mediscare” campaign. According to Gallup polling, Ryan’s plan is more accepted than Obama’s debt reduction plan in every age group except the young. In fact, support for the Ryan plan increases with each older age group to the point that it is supported by almost half the seniors (48%) compared to Obama’s plan (42%) even though Ryan proposes to change Medicare essentially into a voucher system. Obama proposes to do nothing to Medicare – except let it go broke.
A separate Kaiser Family Foundation survey found that a majority of the public (54%) supports Ryan's plan to convert Medicare into a voucher program when it's accurately described as a way to "reduce the deficit and let seniors choose plans based on cost and quality."
Ryan has enlisted the help of House allies in the Republican caucus to fan out into the hustings and help explain the plan. One of Ryan’s warriors is freshman representative Tim Meehan, elected in a swing district not far from Valley Forge. Speaking at a retirement village last week, Meehan concluded his presentation to a group of seniors Democrats love to scare, saying, “You have a congressman from Wisconsin who is showing more leadership and direction than the president of the United States. That is a sad commentary on the moment.”
It came as a shock, then, when none other than Mr. Conservative, Newt Gingrich, sounded off on Sunday’s “Meet the Press” program, calling the Ryan plan “right-wing social engineering” and “radical change from the right." A measure of the support Ryan’s plan enjoys was revealed in the ensuing uproar when conservative pundits and talk show hosts rose in high dudgeon to condemn Gingrich’s remarks. Conservative talk show host, Bill Bennett, obsessed throughout his Monday morning show over the former speaker’s remarks, calling them “an unforgivable mistake” and effectively removing Gingrich from “serious consideration” in 2012. On Tuesday’s show, Bennett was still peeved about Gingrich’s apostasy and invited Gingrich to give an account of himself. Gingrich did himself no favors, denying having said certain things until Bennett played audio clips for him – but that’s another story for another time.
Suffice it to say the House of Representatives passed the Ryan plan a month ago by a vote of 235 to 193 with every Democrat voting "no." The Democrat scare machine went to work, causing some Republicans in tight 2012 House races to get sweaty palms. But current House Speaker John Boehner continues to deny that Republicans are “running away” from the Ryan plan. “That’s just not a fact,” he told Face the Nation recently. “You can ask any one of our members, and they’ll tell you that on average, 80% of the people at these town-hall meetings were supportive of taking big steps to put our fiscal house in order.”
There is no denying that it’s the GOP which is leading the debate on how to get the country’s fiscal future back on track, which the Obama administration derailed with some help from George Bush. Meanwhile, the Democrats have now gone nearly 750 days without passing a budget in the Senate, which they control. Ryan’s spokesman Conor Sweeney told the National Review that “Republicans agree we need to fix our fiscal mess, whereas Democrats can’t even agree that the government needs a budget.”
Ryan continues to present his plan as a sharp contrast to the plan Obama has put forward. And this Monday, Ryan went to great lengths and with great effect to do just that in his speech to the Economic Club of Chicago.
Here are the highlights of his remarks.
The budget debate, Ryan said, has become a “game of green eyeshade arithmetic” in which the government elites – including Obama – insist that temporary spending restraints must be traded for permanent tax increases. This sets up the debate to be little more than an argument over who to hurt and how to manage the decline of our nation. So, higher taxes and rationed healthcare become givens when certain entitlements and spending are declared off-limits for reform. Ryan calls this a “shared scarcity” mentality. It is Obama’s vision of America’s future. To quote Ryan:
In a recent speech he gave in response to our [the Ryan] budget, President Obama outlined a deficit-reduction approach that, in my view, defines shared scarcity. The President’s plan begins with trillions of dollars in higher taxes, and it relies on a plan to control costs in Medicare that would give a board of 15 unelected bureaucrats in Washington the power to deeply ration care. This would disrupt the lives of those currently in retirement and lead to waiting lists for today’s seniors.
Shared scarcity represents a deeply pessimistic vision for the future of this country – one in which we all pay more and we all get less. I believe it would leave us with a nation that is less prosperous and less free.
The missing ingredient in a “shared scarcity” mindset is economic growth. Shared scarcity fails to consider all of the strategies which ought to be deployed to provide incentives for economic growth. It chases ever-increasing spending with ever-increasing taxes, which, in Ryan’s view, reduces the number of “makers” in American society and expands the number of “takers.” The incentives for hard work and risk taking are therefore eliminated, creating a society of discouraged, complacent, and dependent citizens.
Those committed to the mindset of shared scarcity, Ryan said, are telling future generations, “Sorry, you’re just going to have to make do with less. Your taxes will go up, because Washington can’t get government spending down.” They are telling future generations, “You know, there’s just not much we can do about healthcare costs. Government spending on healthcare is going to keep going up and up and up… and when we can’t borrow or tax another dollar, we’ll have to give a board of unelected bureaucrats the power to tell you what kind of treatments you can and can’t receive.”
In contrast to Obama’s pessimistic proposal for spreading the pain around, Ryan proposes four commonsense pillars to restore economic growth in this country and to step back from the spending abyss which the Bush and Obama administrations pushed the country toward.
Ryan’s first pillar for economic growth is for government to stop spending money it doesn’t have which is forcing it to borrow at unprecedented levels. He noted that the rating agency S&P recently downgraded the outlook on US debt from “stable” to “negative.” That sends a bad signal to growth creators. If S&P is telling business that America is a bad investment, they’re not going to expand and create jobs in America – not at the rate we need them to. More debt means more uncertainty, and more uncertainty means fewer jobs.
Averting a debt crisis ultimately means getting healthcare costs under control. The House-passed Ryan budget gets healthcare spending under control by empowering Americans to fight back against skyrocketing costs. The Ryan budget makes no changes for those in or near retirement, and offers future generations a stronger voucher-based Medicare program that they can depend on to guarantee coverage – a plan that provides less help for the wealthy and more help for the poor and the sick.
There is widespread bipartisan agreement, Ryan noted, that the open-ended, fee-for-service structure of Medicare is a key driver of healthcare cost inflation. His disagreement with Obama isn’t about the problem; it’s about the solution for controlling costs in Medicare:
If I could sum up that disagreement in a couple of sentences, I would say this: Our plan is to give seniors the power to deny business to inefficient providers. Their plan [Obama’s] is to give government the power to deny care to seniors.
Ryan reaffirmed the Republicans’ commitment to repeal ObamaCare and its burdensome maze of new regulations. Not only does ObamaCare impose an unconstitutional mandate on every American; it also imposes new regulations on businesses which are stifling job creation.
Let me share with you a figure that serves as a devastating indictment of the new healthcare law: So far, over 1,000 businesses and organizations have been granted waivers from the law’s onerous mandates. These waivers may prevent job losses now, but they do not guarantee relief in the future, nor do they help those firms that lack the connections to lobby for waivers.
What Ryan failed to mention is that 20% of the most recent batch of 204 waivers were given to businesses in Nancy Pelosi’s district.
Ryan’s second pillar for economic growth was the restoration of common sense to the regulatory environment. Regulations should be fair, unintrusive, and should not cause uncertainty as to their impact on America’s employers. Ryan would dismantle the growing scourge of crony capitalism, in which Washington bureaucrats abuse the regulatory process to pick winners and losers in the private economy. The NLRB and the FCC come to mind.
Congressional Republicans continue to advance reforms that stop regulatory bureaucrats from strangling job growth and innovation with red tape. We’ve advanced legislation to stop the EPA from imposing job-destroying energy caps on American businesses. We’ve advanced legislation to revisit the flawed Dodd-Frank law, which actually intensifies the problem of too-big-to-fail by giving large, interconnected financial institutions advantages that small firms do not enjoy.
Ryan’s third pillar recognizes that the economy can’t get back on track if Obama gets his way in trying to tax the country back into prosperity. Prosperity requires low tax rates and a tax policy that doesn’t change year by year, thereby creating so much uncertainty that businesses have no incentive to invest capital to create jobs. Even non-economists understand that high marginal tax rates are a drag on the economy and growth.
As the University of Chicago’s John Cochrane recently wrote, “No country ever solved a debt problem by raising tax rates. Countries that solved debt problems grew, so that reasonable tax rates times much higher income produced lots of tax revenue. Countries that did not grow inflated or defaulted.”
Ryan acknowledged that his plan is in fundamental disagreement with Obama and the Democrats regarding tax reform. A simpler, fairer tax code is needed because individuals, families, and employers now spend over six billion hours and over $160 billion per year figuring out how to pay their taxes. The tangle of special interest credits and deductions that currently exist must be eliminated in order to lower tax rates and promote growth. The Ryan budget that passed in the House does that by making the tax code “simpler… flatter… fairer… more globally competitive… and less burdensome for working families and small businesses.”
In contrast Obama says he also wants to eliminate deductions, but at the same time he wants to raise tax rates. That includes raising the top rate to a whopping 44.8%., which would amount to a $1.5 trillion tax increase on families and job creators. As always, Obama says that only the richest people in America would be affected by his plan. “Class warfare may be clever politics,” Ryan said, “but it is terrible economics. Redistributing wealth never creates more of it.”
The fourth and final pillar of the Ryan plan calls for rules-based monetary policy to protect working families and seniors from the threat of high inflation. It would restrict the current Janus-headed Federal Reserve to a focus on price stability only and get it out of its full employment role. The Fed, like most government agencies has extended its tentacles like kudzu, intruding ever more into the private sector, and most recently used monetary stimulus to bail out the failures of Washington politicians.
Families and businesses rely on a sound money policy, and the Fed will have its hands full if it sticks to that one goal alone. However, the Fed’s recent waywardness from rules-based monetary policy has increased economic uncertainty and caused its critics to call for eliminating the Fed. The Federal Reserve was intended to be an independent agency, not a political arm of the White House. It should explicitly publish and follow a monetary rule as its means to achieve its sound money goal.
We can’t achieve this goal by simply rubber-stamping increases in the national debt limit without reducing spending in Washington. Ryan noted:
Speaker Boehner made this clear in a recent speech at the Economic Club of New York: If the debt ceiling has to be raised, then we’ve got to cut spending. The House-passed budget contained $6.2 trillion in spending cuts. For every dollar the President wants to raise the debt ceiling, we can show him plenty of ways to cut far more than a dollar of spending. Given the magnitude of our debt burden, the size of the spending cuts should exceed the size of the President’s debt limit increase.
In concluding, Ryan told his Chicago audience that the country faces a choice between two futures. It can continue to go down the path toward shared scarcity – the path that the Obama administration has put the country on – or it can choose the Path to Prosperity – the name for the Ryan plan.
Ryan closed by recalling a statement by his mentor, the late Jack Kemp, who in 1979 gave this rationale for the only real choice America has:
We can’t progress as a society by using government to diminish one another. The only way we can all have more is by producing more, not by bickering over how to share less. Economic growth must come first… for when it does many social problems tend to take care of themselves, and the problems that remain become manageable.
Amen, Jack Kemp.
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