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http://www.wpri.org/WIInterest/Vol17No3/Ryan/Ryan17.3.html

Carrying Wisconsin’s Torch of Reform

By Paul Ryan

Wisconsinites are a forward-looking people that fight for a better tomorrow by reforming the broken institutions of today. Our state motto says it all: Forward. Since our early pioneers drafted a constitution in 1848, Wisconsinites have worked to make government more accountable to those it serves and harness the best in its people. From Robert LaFollette’s Progressive Movement to Tommy Thompson’s Welfare Reform—Wisconsin has put forth bold ideas that transform the relationship between the people and their government.

Wisconsinites are hungry for reform. I have held over 400 listening sessions in my ten years of serving Wisconsin’s First Congressional District. Everywhere I go, people tell me, “Washington is broken, and isn’t dealing with our nation’s most pressing problems.” They are right. By failing to tackle the greatest threat to our nation’s long-term economic prosperity—the explosion of entitlement spending—we are failing the next generation of Americans.

Let’s explore this looming fiscal crisis in greater depth. Unrestrained health care costs coupled with the retirement of the baby boomers are driving the social insurance programs of the past century—those that promise health and retirement security—toward financial collapse. Medicare, Medicaid, and Social Security will not only grow themselves into extinction, they will immensely burden our economy and our budget—piling massive amounts of debt on future generations, crippling our ability to compete in the international marketplace, and dramatically reducing American’s standards of living.

Our continued failure to address this crisis has set us on an unsustainable fiscal path. When my three young children are my age (38), the Federal Government will consume 40% of our economy. To put this in perspective, our federal government, in order to function, has historically taken 18.3 cents on every dollar made in America. If we do nothing to address the explosion of entitlement spending, when my kids are my age, 40 cents of every dollar will be needed just to keep the government afloat. This will occur with no new programs, no new spending—double the taxes just to maintain the status quo.

We are shackling our children with a crushing burden of debt and taxes. With Medicare and Social Security alone, we have an unfunded liability of $40 trillion today—which is over $350,000 per household. With each year we put off reform, the problem gets considerably worse—adding $2 trillion more in unfunded liabilities a year. This is what is meant when I say that the Federal government is making promises it knows it can’t keep. The looming fiscal and economic crisis we face is no longer in question. What remains in doubt is whether America’s leaders will lead and set a different course for the next generation.

We must apply Wisconsin’s appetite for reform and realism to the nation’s fiscal and economic crisis. To meet this challenge and secure our fiscal future, I have introduced a comprehensive legislative plan called “A Roadmap for America’s Future.” This proposal recognizes the interrelated crises in health care, entitlement spending, the outdated Federal tax code, and our growing debt.

This Roadmap will keep the size of government at a sustainable level and achieve the following three objectives:
1.Fulfills the mission of health and retirement security for all Americans;
2.Lifts the crushing burden of debt and taxes from the shoulders of future generations; and
3.Strengthens American jobs and competitiveness in the 21st century global economy.

Here are its main components:

Health Insurance

We spend more than any other nation on health care, yet nearly 50 million Americans are uninsured. In addition, Americans with health insurance are losing more of their paychecks to sky-rocketing health care costs. Americans should not fear bankruptcy due to a major illness.

Reducing the costs of health care is my first priority. This would be done by requiring health care providers to fully disclose upfront the prices and quality of health care services. If people know upfront what services cost and who provides the best service, health care providers will be forced to lower prices and provide better service in order to attract patients.

My plan provides universal access to affordable health insurance, by providing all Americans with an advanceable, refundable tax credit to pay for health coverage. Individuals will be able to buy insurance offered by any provider in any state—not just the one where they live—and carry it with them if they move or change jobs. My reforms strengthen the health care safety net, providing direct assistance for those with chronic illnesses and preexisting conditions. If you’re really sick or have a disease that makes it hard or impossible for you to get insurance, the state will help you enroll in and help pay for a health insurance plan. This allocates health care spending more compassionately and more intelligently—providing preventative care on the front end for those with the greatest needs.

Medicaid and Medicare

Medicare is a vital program that provides health care to all Americans over the age of 65. Yet, this program is headed for collapse, with an unfunded liability of $34 trillion. I believe that unless we do something to fix these problems, there will be no health insurance program for future generations of seniors, and I want to make sure it’s there for those who are counting on it.

The bill secures the existing Medicare program for those over 55—so Americans can receive the benefits they planned for throughout most of their working lives. Those 55 and younger will, when they retire, receive an annual payment of up to $9,500 to purchase health coverage that best suits their needs—either from a list of Medicare-certified plans, or any plan in the individual market, in any state.

The $9,500 payment is adjusted for inflation and based on income, with low-income individuals receiving greater support and a funded medical savings account. Seniors with deteriorating health conditions will also receive additional support.

The bill also modernizes Medicaid by giving states maximum flexibility to tailor their Medicaid programs to the specific needs of their populations. It also allows Medicaid recipients to avail themselves of the health coverage options open to everyone else through the tax-credit option. According to the chief actuary at the Centers for Medicare and Medicaid Services, my plan makes these programs permanently solvent.

Social Security

In 2017, Social Security will begin to pay out more in benefits than it brings in through payroll taxes, and the Social Security Trust Fund will be completely exhausted by 2041. When first enacted in 1935, there were 42 working-age Americans for each retiree, and the average life expectancy was 62. With life expectancy now near 80, and only three workers paying to finance benefits for each retiree, it is no surprise that this pay-as-you-go New Deal program will soon collapse.

My proposal’s reforms will be gradually phased in so that the current system remains intact for those in and near retirement. My plan starts by ending the raid on the Social Security Trust Fund. Workers under 55 will have the voluntary option of investing over one-third of their current Social Security taxes into personal retirement accounts. These personal accounts will be overseen by Social Security Personal Savings Account Board—not a stock broker or private investment firm—and will likely enjoy higher rates of return than the traditional benefit. They are also the property of the individual, and are thus fully inheritable.

The bill includes a guarantee that no one’s total Social Security benefits from the personal accounts will be less than if he had chosen to stay in the current system. Combined with a more realistic plan for growth in Social Security benefits, and an eventual increase in the retirement age, the Social Security program can thus become sustainable for the long term. According to the chief actuary at the Social Security Administration, my plan makes Social Security permanently solvent.

Tax Reform

The current federal tax code is complex, burdensome and discourages economic growth. It cannot be fixed with incremental changes; it needs a complete overhaul.

To accomplish this goal, the bill first of all offers individuals a choice of how to pay their taxes—either through the existing tax code, or through a simplified code with a tax return that fits on a postcard. It has just two rates and virtually no special tax deductions, credits, loopholes, and exclusions (except the health care tax credit). Taxpayers themselves choose which code serves them better.

The rates in the simplified code are 10% on income up to $100,000 for joint filers ($50,000 for single filers); and 25% on taxable income above these amounts. There is also a generous standard deduction of $25,000 for joint tax filers, and $12,500 for single filers. There is also a $3,500 personal exemption. This results in a $39,000 exemption for a family of four. The alternative minimum tax is eliminated. And to promote long-term investment in economic growth, taxes on capital gains, dividends and estates are also eliminated.

On the business side, the bill gets rid of our uncompetitive corporate tax—currently the second highest in the industrialized world—and replaces it with a business consumption tax of 8.5%, which is half the average industrialized world rate. It levels the playing field for American-made goods and services by removing taxes from American-made exports and putting an equal tax on foreign imports. It encourages companies to invest in America, promotes jobs here at home, and strengthens the paychecks of American workers.

The Roadmap I’m offering is a real plan, with real proposals, real numbers to back them, and real legislation (H.R. 6110) to implement it. The Roadmap takes us off of our crash course toward stagnation, and moves us onto an alternative, sustainable path. The full plan can be accessed at: http://www.americanroadmap.org/.

Wisconsin has been called “America’s Laboratory for Democracy”—and rightly so. Our laboratory produced the Republican Party and the Progressive Movement. University of Wisconsin-Madison economists crafted and helped implement Social Security in the 1930s. As Wisconsin innovators helped set the framework for the social insurance strategies of the 20th century, Wisconsin must transform them for this century.

Tommy Thompson’s welfare reform of the 1990s exemplifies how we can bring about entitlement reform for this decade. At first, Thompson’s idea that we should empower society’s most vulnerable—rather than further fuel a dangerous dependence—was dismissed as too bold and too upsetting to the status quo. Yet Wisconsin’s welfare reforms—reforms that strive for an ideal, but are rooted in pragmatism and common sense—quickly gained national prominence and became the law of the land.

Similarly, “A Roadmap for America’s Future” is an ambitious proposal. Not everyone will agree with every aspect of it, and that’s fine. But it is my sincere hope that it will spur Congress and today’s political leaders to move beyond simply rehashing the problem—to the politically difficult, but critical task of debating, and implementing actual solutions for the American people.

These problems are too big to grow our way out of, tax our way out of, or borrow our way out of. The problems are not Democratic problems or Republican problems—and cannot be solved exclusively using the political ideology of either party. We need to build bipartisan support across America for leaders to take on our entitlement crisis.

The unique American legacy is that each generation tackles its defining challenge and leaves the next generation better off. Previous generations have risen to the occasion and left America stronger, safer, and more prosperous for the next generation. This looming fiscal crisis is our defining challenge, and we must take decisive action if we are to uphold the American legacy.

Paul Ryan (R) is the Representative to the U.S. Congress from Wisconsin’s 1st Congressional District.

http://www.wpri.org/WIInterest/Vol18No2/Hayes18.2.html

Wisconsin Interest
Volume 18, No. 2
July, 2009

GenNext GOP

Dubbed a future leader, Paul Ryan already shapes the Washington debate.

By Stephen F. Hayes

Shortly after 12:30 p.m. on Jan. 27, U.S. Rep. Paul Ryan walked into a private room at Charlie Palmer’s steakhouse—an upscale restaurant one block from the Capitol in Washington, D.C.

It was exactly one week since Barack Obama had been inaugurated, and some of the country’s most influential political journalists had turned out to hear Ryan. The political director for ABC News, CNN’s vice president for Washington programming, a White House correspondent for The New York Times, the executive producer for NBC’s “Meet the Press”—about a dozen in all.

Ryan walked in wearing headphones. His young press staffer, Conor Sweeney, a graduate of Marquette University, followed behind. When a reporter asked why Ryan was listening to his iPod, the congressman explained that he listened to music between meetings because it helps him relax.

The obvious question followed. What are you listening to?

“Led Zeppelin,” Ryan replied with a smile. Everyone in the room laughed. Ryan didn’t eat much, preferring to spend his limited time talking policy. The session was on background—meaning reporters couldn’t quote him by name.

Ryan nonetheless spent nearly an hour talking, at times in mind-numbing detail, about the likely consequences of the Obama administration’s fiscal policy and what Republicans would do differently. His critiques were policy-focused, as they always are, and smart.

At just 38, Paul Ryan is already considered a guiding voice of conservatives in Washington. In media profiles and speech introductions, Ryan is often described as a next-generation leader of the Republican Party. That’s only half right. Ryan will almost certainly shape the GOP in the years to come. But, as the gathering at Charlie Palmer’s suggests, Ryan is an influential voice in Washington right now.

He is the highest-ranking Republican on the House Budget Committee and a senior member of the Ways and Means Committee. Between those two committees, Ryan has the ability to affect economic policy—from the federal budget and entitlements to government spending and taxes—in an almost unparalleled way.

Eric Cantor, whose role as House Minority Whip makes him the second-highest-ranking Republican, calls Ryan “the intellectual heavyweight within our conference.” He adds: “No one understands the budget and the nuances of America’s fiscal outlook like him. He commands the total respect of his colleagues because he does his homework.”

Ryan comes by this intellectualism naturally. A native of Janesville, Ryan studied economics and political science at Miami University in Ohio. Upon arriving in Washington, he worked as policy director for Empower America, a think tank founded by Bill Bennett and the late Jack Kemp to advance their brand of optimistic conservatism. Perhaps more than any other Republican, he is the avatar of that hopeful philosophy of limited government.

This was in evidence on May 10, when Ryan addressed graduates at his alma mater. He spoke about the new American conformity, which, he argued, looks a lot like the old American conformity. Here’s what he said:

“In Washington, at the center of the American political order, there is nothing more ‘correct,’ nothing more necessary than to conform to the pessimistic view that America has lost its primacy in the world and we are going to have to live with decline at home and abroad,” he said. “We are supposed to adjust to shrunken dreams and manage the stagnation by controlling more and more sectors of what was once a free society.

“‘Free society turned out to be a failure—it allowed unlimited greed to bring our economy down. Now government—moderate, selfless, unambitious government—must step in to direct producers, investors, homebuyers, and entrepreneurs to drive greed out of the 21st century. Government also has to take the lead in creating jobs.

“If you ask how government can create a job without paying for it by taking the money from jobs and workers in the private sector, the new conformists will label you ‘uncompassionate’ or worse. The best we can hope for, they say, is to survive. My friends, America isn’t a nation of survivors. America is a nation of dreamers, innovators—we are a nation of winners.”

Ryan is, at heart, a policy wonk. He’s good-looking and personable, and he can work a room like an old political pro. But he seems to enjoy the drudgery of budget work or retooling targeted tax credits like he’s a fiscal policy analyst working in the basement of the Congressional Budget Office.

A year before the mainstream media labeled Republicans “The Party of No,” Ryan published an 86-page “Roadmap for America,” a detailed plan to put the country on the road to financial stability. Ryan offered three objectives: achieve health and retirement security, lift the debt burden, and promote economic growth.

The pages of the plan are filled with dozens of charts and graphs that demonstrate America’s fiscal crisis and Ryan’s proposals to address it.

The fact that Ryan is articulate and knowledgeable helps explain why he spends much of his time these days on CNBC’s “Squawk Box” or on Fox News discussing Republicans’ opposition to Barack Obama’s rapid and dramatic expansion of the federal government’s role in the U.S. economy.

Ryan does sometimes slip into “wonk-speak”—the kind of Budget Committee jargon that is meaningless to most Americans—but virtually everyone agrees that he is one of the best public faces for conservatives in Congress.

“He’s smart, eloquent, well-informed and committed to the conservative principles that made this country great,” says Liz Cheney, daughter of Vice President Dick Cheney and another next-generation conservative leader.

There is little disagreement among inside-the-Beltway conservatives that Ryan will have a prominent role in the future of the Republican Party. The only question is whether he’ll be director of the Office of Management and Budget in a future Republican administration—or whether he’ll be on the ticket someday himself.

Stephen F. Hayes, a Wauwatosa native, is a senior writer for the Weekly Standard. His books include Cheney: The Untold Story of America’s Most Powerful and Controversial Vice President (HarperCollins) and The Connection: How al Qaeda’s Collaboration with Saddam Hussein Has Endangered America (HarperCollins).