“The Secret Sauce”: Paul Ryan; “I’m Keeping Tax Cuts For The Rich”
Reducing the top tax rate has been the Republican Party’s highest priority for a quarter century. Since the 2012 election, a handful of apostates have gently urged it to change course. Paul Ryan, who remains the most powerful figure within the party, has just given an interview to John McCormack, and he has a message for the reformers who want to change course: forget it. Ryan, reports McCormack, “made it clear that he disagrees with some conservatives who are willing to accept a high top tax rate in order to increase the child tax credit.”
If the significance of Ryan’s statement here doesn’t immediately strike you, let me explain. Starting in the early 1980s, supply-side economics emerged as the Republican Party’s policy doctrine. Supply-side economics holds that the marginal tax rates hold the key to economic growth, and thus that even tiny changes to tax rates can unleash massive changes to economic performance. Accordingly, Republicans have valued low tax rates over absolutely everything else.
In the 2012 election, that commitment turned into a major liability for the party. The Republican ticket ran on a somewhat sketchily defined plan to reform taxes, the impact of which would have been to give the richest one percent a huge tax cut and impose higher taxes on the middle class.
The Republican reformers have, correctly, identified the commitment to reducing the top tax rate as a major (or even the major) liability. The most important theme of “Room to Grow,” a policy manifesto by “reform conservatives,” is that the GOP should abandon supply-side economics. In some ways, this is the key to many other policy choices the party faces. If they keep their traditional commitment to low top tax rates above all else, there’s simply no money to spend elsewhere. On the other hand, if Republicans stop proposing to cut rich peoples’ taxes by hundreds of billions of dollars, they’ll be able to spread that money around on other things — tax credits for middle-class families, maybe some kind of health insurance — that would benefit a vastly larger bloc of voters. The policy champion for this bloc is Utah Senator Mike Lee, who has at least tried (the math is tricky) to craft a tax-reform plan that would hold taxes for the rich constant while expanding the child tax credit.
The reformists cast their argument in the most soothing possible tones. Cutting marginal tax rates was the correct policy in 1980, they agree. (It is axiomatic among Republicans that everything Ronald Reagan did was correct, even the things that contradicted other things he did.) But the world has changed, tax rates have fallen, and what worked for 1980 does not apply today.
With predictable fury, supply-siders have denounced this heresy. You can get a flavor of the intra-party debate in columns appearing in places like Forbes or The Wall Street Journal, the later of which retorts, “Good economic policy doesn’t have a sell-by date. (Adam Smith? Ugh. He is just so 1776.)”
Ryan has positioned himself as a reformist in some ways. He acknowledged that calling people who get government benefits “takers” is mean. On the other hand, Ryan is a longtime, deeply devoted supply-sider. As a teenager, he immersed himself in The Way the World Works and Wealth and Poverty, the two foundational texts of the supply-side economics worldview (both of which happen to be barking mad), which teach the absolute primacy of marginal tax rates.
So Ryan is cross-pressured here, between a faction that is attempting to excise the party’s weaknesses and his own most fundamental convictions. His answer to McCormack is surprisingly blunt:
“I’m a classic growth conservative. I believe that the best way to help families, the best way to help the economy is to reduce rates across the board,” Ryan said when asked about Utah senator Mike Lee’s plan to increase the child tax credit and create two income tax brackets of 15 percent and 35 percent. “Growth occurs on the margin, which is a wonky way of saying, if you want faster economic growth, more upward mobility, and faster job creation, lower tax rates across the board is the key—it’s the secret sauce.”
That’s Ryan’s conviction. He disagrees with Lee that subsidizing middle-income families with children ought to be the party’s priority. He still believes marginal tax rates are the “secret sauce.” To Ryan’s credit, in this case, he is not hiding it.
By: Jonathan Chait, Daily Intelligencer, New York Magazine, August 20, 2014
“The Tea Party Is Abandoning Paul Ryan”: It’s No Longer A Matter Of ‘If’ The Full Movement Will Turn On Him, It’s When
When Mitt Romney chose Representative Paul Ryan as his running mate in the 2012 presidential election, the tea party was ecstatic. “It’s a big step toward what the tea party has been trying to accomplish,” Matt Kibbe, the president and CEO of FreedomWorks, said at the time. “It gives people a reason to be more enthusiastic about the Republican ticket.” But just two years later, Kibbe and his fellow tea party activists are singing a different tune: Ryan has betrayed the movement.
The first significant break between Ryan and the tea party came at the beginning of this year, when he collaborated with Senator Patty Murray, the Democratic chair of the Senate Budget Committee, on a budget that avoided another government shutdown. That deal replaced $65 billion of the sequester over the next two years by requiring federal workers to contribute more to their pensions, implementing new fees on airline tickets, and cutting spending a decade from now. While the deal actually reduced the deficit by $20 billion in total, the far right was furious. “It is disappointing to see Chairman Ryan forget lessons learned this past spring, when House Republicans united to win reasonable spending limits in the face of President Obama’s hysterical predictions that even modest cuts would harm our nation,” said Tim Phillips, the president of American for Prosperity. Erik Erickson, of Red State, wrote “Bend over America, here it comes.”
If Ryan hoped to recover any good will with his famous budget—the one he releases each year as head of the House Budget Committee—those hopes were quickly dashed. Sarah Palin called it “a joke” and other tea party leaders criticized it for insufficiently cutting spending. Those comments are tough to square with the previous praise tea party leaders have heaped on Ryan. The “Path to Prosperity” is one of the main reasons that they were thrilled with Romney’s selection of Ryan as his running mate, and the 2014 Ryan Budget is just as conservative as in the past. (Only in this version and the FY 2014 one was Ryan able to balance the budget in ten years.)
Things have only grown worse since then. In July, Ryan confirmed their suspicions when he announced a new deficit-neutral antipoverty program. In doing so, he effectively disowned his budget, which proposes huge cuts to programs for low-income Americans. Tea party groups have yet to weigh in on Ryan’s proposal, but it’s hard to see how they’d approve. If the spending cuts in Ryan’s 2015 budget were too small, then his antipoverty agenda, which doesn’t cut welfare spending at all, won’t be acceptable.
This past week, Ryan has hit the media circuit to publicize his new memoir, The Way Forward, in which he puts more distance between himself and the tea party. He has eschewed the phrase “makers and takers” and even rejected his previous analogy of the social safety net as a “hammock” that “lulls able-bodied people to lives of dependency and complacency.” Ryan’s repudiation of these phrases will be seen as yet another dismissal of the tea party worldview.
The final straw may have been his description of the government shutdown. In The Way Forward, Ryan calls that political strategy a “suicide mission.” As Sam Stein and Arthur Delaney write in the Huffington Post, Ryan’s account whitewashes his actual role in the shutdown. He was more supportive of it than he admits. But the message is clear: The tea party’s strategy hurt the Republican Party and should not be repeated. This has not gone over well on the right. In Politico Magazine, Scottie Nell Hughes, the news director of the Tea Party News Network, writes, “[W]e of the grassroots GOP are in no mood to hear that our push for defunding Obamacare and using the debt ceiling to force President Obama to curb reckless spending had all the wisdom of a Japanese kamikaze.”
“If Paul Ryan does not have enough tact to forgo insulting the conservatives within his own party,” she added, “then I have serious doubts he has the wisdom and judgment needed to lead the GOP to victory in 2016.”
Ryan’s fall from grace on the right is emblematic of his transition from ideologue to practical policymaker. In the process, Ryan has received a better reception on the left. At The Week, writer Ryan Cooper called it a “marked improvement from his previous efforts.” But this transformation is not without its costs: Ryan is no longer the tea party golden boy.
“I’m very disappointed in Paul Ryan,” Judson Phillips, the founder of the Tea Party Nation, writes in an email. “He has a raging case of Potomac Fever and his only goal now seems to be embracing John Boehner’s freshly laundered white flag of surrender.”
Ryan has not yet alienated his more conservative colleagues in Congress. And many activists, particularly those less attentive to the daily happenings in Washington, may not have even noticed his betrayal. But repeatedly this year, Ryan’s actions have made it clear that he is distancing himself from the tea party. It’s no longer a matter of if the full movement will turn on him. It’s a matter of when.
By: Danny Vinik, The New Republic, August 21, 2014
“A Conversion On Political Rhetoric”: The Fascinating Political Evolution Of Paul Ryan
Paul Ryan’s new book The Way Forward is meant to be bought, not read.
You buy a book like this because you’re in a conservative book club, or you’re a big Paul Ryan fan, and you feel obliged. It’s like voting, but it costs money. Publishers commission these books hoping to get a big payoff if and when the author is nominated for president and suddenly a much larger share of the country feels obliged to vote, er, buy Ryan.
But there’s more to The Way Forward than that, largely because Ryan is an increasingly important and intriguing figure in Republican politics. His persona evolves — often, it seems — in tandem with the felt-needs of the GOP. Ryan has always been a little further to the right than the average elected Republican. But that didn’t stop him from corralling votes for Medicare Part-D when George W. Bush needed them. Then when the GOP constituents needed someone who looked good under a green eyeshade, he became a much sterner budget watcher, and strenuous fiscal conservative.
The first half of the Ryan book is a biography as starched and colorless as his collars. But the second half of The Way Forward is fascinating. It gives a view of what Ryan wants to be now and over the next two years, possibly as he contemplates a run for the presidency. And make no mistake: Ryan is transformed.
No longer is Paul Ryan the P90X-ripping, budget-slashing devotee of Ayn Rand that Democrats gleefully caricatured as someone who wanted to push grandma off a cliff. Today he’s the geeky white guy dancing badly at a black church, and then biting his lip and nodding to signal how much he is listening, and learning. He’s putting in an effort to expand his horizons personally. He is undergoing a political conversion, or at least a conversion on political rhetoric.
Quite literally, Paul Ryan experiences a kind of Come-To-Frank-Luntz moment when someone asks him who he is talking about when he refers to some people as “takers.” Ryan had in the past adopted the language of “makers and takers” to describe people who are paying more in taxes than they receive in benefits, and people who are receiving more benefits than what they pay. Ryan says this language was just in the air at the time he adopted it. And it was. A Nation of Takers was the scorching title to a sobering (and sober) book by Nicholas Eberstadt about the shape of America’s entitlement state. Eberstadt’s book is exactly the kind of doomsday look into the spreadsheets that Ryan was getting into then.
Today, Ryan won’t disavow the math, exactly, but he has discarded the implied insult he attached to it.
[W]hile the problem it depicts is real and worrisome, the phrase “makers and takers” communicated a lot more than just the dilemma I was trying to describe. That day at the fair was the first time I really heard the way it sounded. As I stood there, listening to the guy from the Democrats’ tent lay into me, I thought, “Holy cow. He’s right.” [The Way Forward]
Ryan also talks about his experiences of reaching out to constituencies where there aren’t many Republicans. In what is probably the most substantive political point in the book, Ryan says what many already suspect, that the 2012 election proved that “focusing heavily on simply turning out our traditional coalition is a losing strategy.”
Ryan does what a politician in this position should do — he takes his lumps just by showing up for constituent events among people who are not naturally aligned to him. Black constituents often tell him to his face that they disagree with him. “[A]t least they were telling me, personally, instead of just some pollster canvassing the neighborhood,” he writes. He says that these events communicate that a person who has conservative politics can still care enough to show up and talk to minority constituents.
This is the right thing politically, but it’s also the right thing to do, period. The GOP should follow Ryan’s example. It would be good for the country. Citizens deserve the competition for their votes that gerrymandering and polarization deny. No major party should effectively ignore an entire demographic or geographic group of Americans.
Now, there are no great revelations in this book. It’s filled with easy-to-understand anecdotes about the malfunctioning of the health-care system before and after ObamaCare, and the efficiency of market-oriented solutions. These will be repeated many, many times by Ryan in the medium-term of his political life.
Ryan also repeats Jack Kemp’s name over and over again, almost as much as he does Reagan’s. Kemp was a Republican who worked hard to make GOP principles appealing to urban and minority voters. He was HUD secretary under George H.W. Bush and Bob Dole’s vice presidential candidate. Kemp is an odd figure, combining the supply-side politics of a Dan Quayle with the social idealism of a George Romney. He referred to himself as a “bleeding-heart conservative.”
And a bleeding-heart conservative sounds great in theory. In a way, it’s what George W. Bush attempted with his “compassionate conservative” brand. But Kemp was never really a national figure, and his unique policy ideas never really got purchase among their supposed beneficiaries. He was admired more than followed. He made Republicans feel better about themselves, without winning great victories. Maybe the time is ripe for a return to Kempism. But I have my doubts.
By: Michael Brendan Dougherty, The Week, August 21, 2014
“None Of Ryan’s Ideas Are New”: Stop Calling The GOP The Party Of New Ideas
Paul Ryan, the perennial media darling and the Republican vice-presidential nominee in 2012, has released an anti-poverty plan that has been widely hailed by a group of conservative policy enthusiasts known as the reformicons. According to Ross Douthat, The New York Times‘s house reformicon, the plan represents new and exciting conservative thinking, reflecting the “growing contrast between the policy ferment on the Republican side of the aisle and the staleness and/or small-ball quality of the Democratic Party’s ‘what comes after Obama?’ agenda.”
The problem with this argument is that none of Ryan’s ideas are new, and many of them are the antithesis of exciting.
Yes, the Ryan plan contains some ideas that are genuinely good. Its calls for major criminal justice reform are salutary — mass incarceration is fiscally wasteful as well as wasteful of human lives, and seeing an endorsement from a prominent Republican public official is reason for cautious optimism. It’s easier to propose cuts to corporate welfare in white papers than in the congressional sausage-making process, but to do so is unobjectionable. And proposing reforms to local regulations such as licensing requirements are at least defensible in some cases. None of these ideas are new, but originality is overrated — there is the potential basis for agreement here.
The core social welfare proposals of Ryan’s plan, however, fail both the originality and goodness tests. The plan does, at least, avoid the direct, savage cuts to discretionary spending that were a hallmark of Ryan’s previous budgets. Ryan’s proposal entails converting a great deal of federal anti-poverty spending into block grants to state governments, which would be free to experiment with those funds. There is, to put it mildly, nothing novel about this idea. Going back to conservative southern Democrats in the New Deal, conservatives have advocated giving states more discretion about how to use federal money.
But more to the point, in addition to being very old, the block grant idea is terrible. As the economist Max Sawicky notes, spending through block grants has the effect of creating disincentives for states to spend adequate money on poverty, while also undermining the political basis for maintaining the programs. In addition, giving the states discretion has tended to involve withholding spending from the “underserving” poor, who tend to be overwhelmingly people of color. The intrusive paternalism the Ryan plan encourages is also unattractive.
The notion that “let them eat states’ rights” is a new and exciting idea is particularly perverse given some other recent developments. To the widespread applause of Republicans, a panel on the D.C. Circuit Court of Appeals read the Affordable Care Act as not providing subsidies to people purchasing health insurance on federally established exchanges. According to defenders of the decision, this was not a drafting mistake; they say Congress intended to only make the subsidies available on state-established exchanges, but were surprised by how few states went along.
As a reading of the ACA, this argument is absurd — clearly Congress anticipated that some states would not establish exchanges, which is why the federal backstop was created. Virtually nobody involved in creating the ACA believes that the law was designed to create federal exchanges that wouldn’t work. It is fair to say, however, that some Democrats were surprised by how many states proved unwilling or unable to establish their own exchanges.
But consider the implications of this. The latest conservative legal argument against the ACA boils down to: “you screwed up — you thought the states actually wanted to provide people with health care!” And the Supreme Court re-writing the ACA in 2012 to make it easier for states to reject the Medicaid expansion has also been a catastrophe, with Republican statehouses inflicting easily avoidable pain and suffering on millions of people to prove their anti-Obama bona fides.
So — why is devolving anti-poverty policy to the states supposed to be a great idea again?
Indeed, the experience of the ACA is a compelling repudiation of the idea that giving states more discretion over social policy is a good idea — or that Republicans at the state level genuinely care about helping the poor and the needy. Many statehouses are opposed to federal anti-inequality measures in principle, and even less hostile ones have proved administratively inept. Anti-poverty policy in the U.S. needs more federal intervention, not less.
By: Scott Lemieux, Professor of Political Science, College of Saint Rose in Albany, N.Y; The Week, July 30, 2014
“Paul Ryan’s Stale Ideas On Poverty”: Retreaded Idea’s Surrounded With The Language Of Innovation
Paul Ryan is counting on this: Because he says he wants to preserve a safety net, speaks with concern about poor people and put out a 73-page report, many will elide over the details of the proposals he made last week in his major anti-poverty speech.
The Wisconsin Republican congressman is certainly aware that one of the biggest political difficulties he and his conservative colleagues face is that many voters suspect them of having far more compassion for a wealthy person paying taxes than for a poor or middle-income person looking for a job.
So Ryan gave a well-crafted address at the American Enterprise Institute in which the centerpiece sounded brand spanking new: the “Opportunity Grant.” The problem is that this “pilot program” amounts to little more than the stale conservative idea of wrapping federal programs into a block grant and shipping them off to the states. The good news is that Ryan only proposes “experiments” involving “a select number of states,” so he would not begin eliminating programs wholesale. Thank God for small favors.
Ryan surrounds his retread idea with the language of innovation. “The idea would be, let states try different ways of providing aid and then to test the results — in short, more flexibility in exchange for more accountability,” he declared. “My thinking basically is, get rid of these bureaucratic formulas.”
Who can possibly like those “bureaucratic formulas”? The phrase is another disguise. Among the programs Ryan would block grant are food stamps (now known as the Supplemental Nutrition Assistance Program or SNAP). Food stamps are one of our most valuable initiatives because people are automatically eligible for them when they lose a job or their income drops sharply. Studies have amply documented how important food stamps are to the well-being of children.
For the economy and for the disadvantaged, curtailing SNAP would be devastating. While providing nutrition help to families in desperate need, food stamps also offer an immediate economic stimulus at moments when the economy is losing purchasing power. Economists call such programs “automatic stabilizers.”
Ryan’s block grant would not be nearly as responsive to economic changes. If Congress would have to step in, its reaction would be slow. And the history of Ryan’s own budgets shows that increasing spending for poor people is not exactly a priority on his side of politics.
Food stamps aren’t the only programs that get wrapped into the grant. Housing vouchers go there, too, which could lead to more homelessness. So does money for child care. Ryan says there would be rules barring states from using funding from his Opportunity Grant for purposes other than helping the needy. But it’s not clear from his outline how he’d stop states from using their new flexibility to move spending away from the needy indirectly by substituting block grant money for existing expenditures.
Ryan might reply: You just don’t trust the states! And my answer would be: You’re absolutely right, there are some states I don’t trust to stand up for their poor people. I’d point specifically to the 24 states that are depriving roughly 5 million Americans of health insurance because they refuse to participate in the Medicaid expansion under the Affordable Care Act.
In his speech and report, Ryan movingly described two hypothetical Americans, “Andrea” and “Steven,” and how much they could benefit from intense counseling by a case worker. There may well be something to this, but it’s expensive. How much would states have to cut basic assistance to the poor to hire additional case workers?
And by the way, one of the programs Ryan would eliminate to pay for an undoubtedly positive part of his plan — a roughly $500-a-year increase in the Earned Income Tax Credit (EITC) for childless workers — is the Social Services Block Grant, which helps pay for the kinds of interventions he wants for Andrea and Steven.
There is such a hunger for something other than partisanship that the temptation is to praise the new Ryan for being better than the old Ryan and to leave it at that. It’s good that he moved on the EITC and also that he embraced sentencing reform. I also like his suggestion that we re-examine occupational licensing rules.
But forgive me if I see his overall proposal as a nicely presented abdication of federal responsibility for the poor. “Experimenting” with people’s food-stamp money is not something we should sign onto.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, July 27, 2014
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