“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
“Rand Paul’s Trick”: Big Emphasis On Middle-Class Voters At The Expense Of Po’ Folks
Mike Gerson pulls off a nice two-cushion shot in a WaPo column on GOP minority outreach. First off, he spanks reformicons for their big-emphasis on middle-class voters, arguably at the expense of po’ folks:
They consistently pitch their approach toward the middle class — in part to distinguish it from previous iterations of compassionate or “bleeding heart” (Kemp’s phrase) conservatism. The cover of the reform-conservative manifesto — “Room to Grow: Conservative Reforms for a Limited Government and a Thriving Middle Class” — features a lawn mower on fresh-cut grass. The conservative rebirth will evidently spring from suburban yards on a lazy Saturday morning….
A party that does not forthrightly address the largest source of division in U.S. history and American life — now dramatized in the tear gas haze of Ferguson, Mo. — is not morally or intellectually serious. And even as a political matter, women voters, Catholic voters and younger voters would prefer a chief executive who seeks the interests of all Americans, including those unlikely to vote for him or her. A commitment to national unity is an indicator of public character. The Kemp project has never been more urgent for Republicans.
So Gerson should be pleased by Rand Paul, with his particular focus on African-American outreach, right? No, not so much. He considers Paul’s ability to come up with selective libertarianish positions that sound attractive to non-government-haters a “trick.”
Paul has risen to prominence by employing a political trick, which is already growing old. He emphasizes the sliver of his libertarianism that gets nods of agreement (say, rolling back police excesses) while ignoring the immense, discrediting baggage of his ideology (say, discomfort with federal civil rights law or belief in a minimal state incapable of addressing poverty and stalled mobility).
As a senator, this tactic has worked. But were Paul to become the GOP presidential nominee, the media infatuation would end, and any Democratic opponent would have a field day with Paul’s disturbing history and cramped ideology. On racial issues, the GOP needs a successor to Kemp — and an alternative to Paul.
Get used to these sort of attacks if Paul’s viability grows. At some point, of course, they would vanish altogether if the man gets close to the GOP nomination.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, August 19, 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
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