James Pethokoukis — May 2012
It’s probably safe to assume that no elected official in America understands the ins and outs of the labyrinthine U.S. budget the way Paul Ryan does. The 42-year-old Wisconsin Republican and chairman of the House Budget Committee has dreams of completing the small-government Reagan Revolution so that America might avoid repeating the “managed decline” of Old Europe. Ryan knows the numbers and projections and models backward and forward. He knows the strengths and weaknesses of his own arguments about reforming the Entitlement State and of those espoused by his opponents across the aisle and inside the Obama White House. He knows how the legislative process can breathe life into ambitious budget plans or, far more often, suffocate them in the cradle.
Ryan knows it all to a fine granularity. And that is not all he knows. As a veteran of the conservative movement who started out writing speeches for Jack Kemp and William J. Bennett at their joint think tank, Empower America, Ryan knows how three decades of off-and-on conservative governance in Washington have given credence to the notion that, in domestic affairs, Republicans understand how to cut taxes—and not much else. This has certainly been the case when it comes to fixing America’s social-insurance entitlements. Creating a financially sustainable safety net that does not sap America’s economic dynamism has been a political and policy puzzle, and repeated attempts to solve it have ended in economic or political disaster, or both.
Consider this: In 1983, President Ronald Reagan and House Speaker Tip O’Neill struck a deal to save Social Security through a combination of benefit cuts and tax increases. The agreement continues to be highlighted by Democrats as a model for bipartisan reform. Yet not only was Social Security not saved—the program almost immediately veered back into long-term insolvency—but several decades of surpluses in the Social Security “lockbox” were used cynically to make federal budget deficits look smaller than they were. For instance, if you don’t count “borrowings” from the Social Security trust fund, the four-year, $559 billion surplus in the late 1990s was really a two-year, $88 billion surplus.