Rep. Ryan Gets An Audience

Published Jul 22, 2010. By Eliza Gray.

Early this year, Rep. Paul Ryan began pushing a plan to shrink the burgeoning budget deficit. Now, amid much hand-wringing by politicians and government officials over a deficit projected to reach $1.5 trillion this year, people are listening.

The Wisconsin lawmaker, the top Republican on the House Budget Committee, spoke at the Brookings Institution today, along with economists and policy experts, on his “Roadmap for America’s Future.” His approach: cut spending for Social Security, Medicaid and Medicare, and keep tax rates low to stimulate growth.

Government spending has become a hot button political issue heading into the congressional election in November, as Republicans and Democrats disagree about how to jumpstart the sluggish economy and get more Americans back to work.

Ryan and others warned that we must do something now lest we follow the path of Greece, Spain and Italy.

But the panelists disagreed about how to tackle the problem. Ryan wants to do it exclusively by cutting spending. His plan would eliminate the estate, capital gains, and alternative minimum taxes and would cut spending by trimming the size of the social safety net: Social Security, Medicaid and Medicare. Ryan’s plan would significantly reduce spending on Medicare, the health plan for the elderly, by replacing it with a system that would allow recipients to choose their own private health plan, partly subsidized by the government.

Parts of Ryan’s plan drew strong criticism from progressives. Brookings tax expert William Gale said it would essentially eliminate Medicare as we know it, and the tax changes would place too much of a burden on low- and middle-income people while giving the rich a bonus.

Diane Lim Rogers, chief economist at the Concord Coalition, articulated another popular position: Yes, the deficit is unsustainable, but it has to be cut with a combination of spending cuts and increased taxes. Rogers offered a personal analogy. Years ago, she lost her freshman 15 at the University of Michigan through a combination of diet and exercise; Ryan’s plan, she said, put too much emphasis on dieting (spending cuts) and not enough on exercise (tax increases). Realistically, Rogers said, Americans will have to adjust to paying taxes at a higher percentage of GDP than the 19% that we have been used to historically.

Ryan, Rogers, Gale and others at Brookings today weren’t the only ones kicking around ideas on how to narrow the budget gap. At a White House press briefing today, President Barack Obama spoke about the importance of getting spending under control as he touted White House budget office work on a blueprint that would freeze nondefense discretionary spending for three years.