The Ryan Plan is Only Half of a Bridge

posted at 10:07 am on April 7, 2011 by Jazz Shaw
[ Congress ]   

Paul Ryan is certainly the picture of a man whose star is quickly on the rise. Two years ago he seemed like a lone voice in the wilderness, calling for measures of fiscal restraint which even most members of his own party were afraid to embrace. Now he stands as chairman of the House Budget Committee and the focus of a national debate over how to tame the mounting debt crisis. This week he took to the soap box once again in an attempt to explain the severity of the problem we’re dealing with and why such “radical” measures are required to address it. Michael Barone covers it in the Examiner.

“What if the president and your representative saw it coming and could have prevented it from happening?” Ryan said. “What would you think of them if they didn’t?” A hush came over the audience at the American Enterprise Institute, where I am a resident fellow.

It was Ryan’s way of saying that the financial meltdown arrived largely without warning, while the impending fiscal crunch is like a runaway freight train.

“This is the most predictable crisis in the history of our country,” he went on. “We are on our path to a debt crisis” like those we’ve seen recently in Europe, with the national debt as a percentage of gross domestic product rising, under President Obama’s budget, past the 90 percent danger point on its way to 800 percent.

While I admire the efforts of Ryan and his supporters to move boldly in the area of cost cutting, the manner in which the Republican Party leadership is framing and constraining both the proposals on the table and the packaging effort to sell it are still falling short in two areas. And, as usual, it’s ultimately the politics involved which is poisoning the well. There is no need to rehash each line item here, since this is a question of style and approach, not math.

Even under the boldest scenarios for the 2012 budget, where Ryan is talking about cuts which could add up to trillions of dollars over the coming years, the numbers still don’t add up to a surplus. While it’s better than nothing, it still doesn’t turn the ship of state around. It simply means a somewhat slower slide toward hell. So what is the missing piece of the puzzle? Revenue.

Sadly, Republicans are genetically allergic to the idea of increased government revenue. Some areas of this discussion are not going to change in our lifetimes, so the idea of increasing tax rates in any form will probably remain off the table. But that doesn’t mean an answer isn’t out there, and it comes from tax reform. Ryan is already being bold, but why stop there? He can solve the other half of the equation if the GOP is willing to lay out a bold plan for tax reform as part of the budget cutting package. You don’t need to increase tax rates. You need to clean up and fix the tax code so that Washington can actually collect the funds which it should already be taking in. Even if we can’t entirely scrap the current tax system in favor of a fair tax, flat tax, or whichever theory you prefer, we could start by closing a lot of loopholes and streamlining the system.

Without that, we’re forced to rely on the “trickle down” theory to supply the funds needed to get us back in the black. Sadly, that has never performed up to expectations and it’s not going to solve this crisis any time soon. And frankly, we should stop pretending that it will.

The second problem comes in how this plan is being packaged for sale to the public, as well as to the Democratic opponents on the hill. There is a narrative being built out there which is all too familiar. As soon as the GOP got hold of the people’s purse and got ready to start cutting, their first targets were relatively insignificant pockets of money designed to enrage the liberal wing of the country as much as possible. (Speaking, of course, of cutting funding for Planned Parenthood and NPR, among other items.) But where was the “give” on the part of the Republicans? If you only go after the opponent’s rice bowl, you give them every reason in the world to stiffen their spines and push back with a media blitz about how the GOP wants the elderly to live on a diet of cat food and polluted tap water. These tactics make the Republican leadership look like they are not serious about the budget crisis and are only using it as a stunt to push the social conservative agenda.

There need to be cuts offered which will not be popular with parts of your own base if you want the nation as a whole to take you seriously. We could begin by offering to cut massive federal subsidies in areas like agriculture (read ethanol) and, yes, even oil production. Everyone needs to give up something if this is going to work. Target some things near and dear to the conservative base as a show of good faith, demonstrating that the adults are truly back in charge and recognize that the cuts will have to hit everyone, or nobody is going to agree to them.

Massive, painful cuts are required to get across this gap, but they are only half of the required bridge. Increased revenue and the ability to get a sufficient portion of the Democrats along for the ride take us the rest of the way. And half a bridge isn’t a bridge at all. It’s a cliff.

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