Ryan: You'd better believe we'll take on entitlement spending in 2018

You’d better believe that Paul Ryan is either fooling us … or more likely, fooling himself. Republican leadership took a lot of heat over its deficit spending in the tax bill, adding at least $1.4 trillion to the national debt over the next ten years, although that’s from a baseline left by Barack Obama budgets that already had planned to add $45 trillion over the same period. That’s what made Nancy Pelosi’s lecture on the House floor yesterday so ironic and hypocritical; the woman who pushed through that massive deficit spending claimed the republic would end over an increase in it of less than 3%.

Not all the heat came from Democratic hypocrites, however. A number of Republicans and conservatives objected to the abandonment of fiscal responsibility in the tax bill, wondering when the GOP had decided to embrace deficit spending rather than reform the budgetary process. Ryan promised this morning that Congress would tackle that in the new year by delivering on entitlement reform. No, really:

Er … suuuuuure, pal. As badly as such reform is needed, and there’s no doubt about that at all, the idea that the GOP can pass entitlement reform with 51 votes when the Senate was barely able to deliver tax cuts with 52 is nothing short of fantasy.

For that matter, it’s unclear whether Ryan could even deliver a majority for serious entitlement reform in the House, given the election-year environment and the need to reduce and/or eliminate benefits to bring costs under control. But let’s say for the sake of argument that Ryan can get to 218. Even if Senate Republicans pass another budget resolution to consider entitlement reform under reconciliation — which seems unlikely — the issue will split their own caucus. How many purple-state Senators want to go home in 2018 to campaign on cutting constituent benefits, no matter how necessary it might be? For that matter, how will the NRSC compete even in red states where they hope to pick up seats with their 26-8 advantage when Democrats start running hysterical ads about Republicans killing the poor to feed the rich? There was a reason Donald Trump refused to put entitlement reform on his 2016 agenda, and why he’s resisted any discussion of it in 2017.

It’s not that entitlement is a difficult lift; it’s impossible. Ryan might as well promise to take up repealing the 16th and 17th Amendments and bringing in the Fair Tax and oversight of Washington by state governments. They’re great ideas in the proper context, and utterly unachievable.

In a different context, Savannah Guthrie asked Ryan, “Are you living in a fantasy world?” All signs point to yes:

Guthrie was pushing back on the idea of the tax bill as stimulus, an argument for which Ryan was prepared:

“CEOs aren’t waiting on a tax cut to ‘jump-start the economy’–a favorite phrase of politicians who have never run a company–or to hand out raises,” Bloomberg said. “It’s pure fantasy to think that the tax bill will lead to significantly higher wages and growth.”

“I’ll ask you plainly, are you living in a fantasy world?” Guthrie asked Ryan.

Ryan pushed back, citing a survey from the National Association of Business Manufacturers.

“Surveys would show the vast majority of businesses are going to do just what we say, reinvest in their workers, reinvest in their factories, pay people more money, higher wages,” he said.

On the tax bill, Ryan stands on more solid ground than Guthrie. The stimulus impact is still debatable, but it’s certainly a better approach to growth than the “shovel ready jobs” and state bloc-grants strategies of the 2009 Democratic stimulus. States just used the latter to paper over budget holes, and the former turned out to be a bad joke. Corporations with lower tax burdens will want to put their money to use, especially in markets where doing so doesn’t result in penalties. Whether that results in growth-stimulating investments remains to be seen in this instance, but at least some of the obstacles to that have been removed or reduced. The stimulus is being directed to the entities that actually create jobs instead of self-perpetuating bureaucracies that pay public-employee union dues.

The impact on taxpayers should be broadly positive, too, despite the hysterics of the bill’s critics. The non-partisan Tax Policy Center, using data from the left-leaning Brookings Institute, concludes that most Americans will see taxes fall, although that is more true of higher-end earners:

The impact of the proposal on individual taxpayers differs depending on their income sources, demographic and family statuses, and other characteristics that affect eligibility for certain tax benefits. Our estimates of the number of taxpayers who would pay more tax or less tax than under current law exclude certain minor provisions (listed in tables 4, 5, and 6), for which it is difficult to assign the tax changes to specific taxpayers.

In 2018, 80 percent of taxpayers would receive a tax cut from the included provisions–averaging about $2,100–and about 5 percent would face an average tax increase of about $2,800 (table 4). In the bottom income quintile, 54 percent would receive a tax cut and 1 percent would face a tax increase. In the middle income quintile, 91 percent would receive a tax cut and 7 percent would face a tax increase. In the top 1 percent of the income distribution, 91 percent would receive a tax cut and 9 percent would face a tax increase.

The biggest problem with this tax bill is not its supposedly radical nature, but its lack of such. We need a complete rethink of how taxes are levied and collected, and at one time the Republican Party had big ideas and courage to pursue them. All this does is shuffle the brackets and percentages around while leaving much of the same overcomplex, social-engineering structure in place. Why did Republicans fade so badly on taxes? Because once in power, they lacked the courage of their convictions.

With that in mind, please explain how entitlement reform is just around the corner in 2018.