Paul Ryan: The Roadmap Warrior

BY Matthew Continetti

Paul Ryan's Roadmap for America's Future would drastically overhaul the American welfare state in a free-market direction. The Congressional Budget Office says it would solve the entitlements crisis through a series of changes to Social Security and Medicare and Medicaid.
The Roadmap also includes a fundamental tax reform -- one that Ryan says, and the CBO assumes, would bring in revenues equivalent to the long-term historical average of 19-percent of GDP. Two new studies dispute that figure, however.

I talked to Ryan [Wednesday] evening to get his response.

"We feel good about our numbers," Ryan told me. "You can tweak a plan to get it toward a historic trend."

He's referring to a Brookings Institution's Tax Policy Center study that says the Roadmap would fall short of its 19-percent goal over the next 10 years, bringing in revenues of somewhere between 16.6 percent and 16.8 percent of GDP.

In a statement [Tuesday] night, Ryan said that "the purpose of the Roadmap is to get spending in line with revenue -- not the other way around."

He reiterated that argument in his conversation with me. "The point is the spending."

Philip Klein made some salient observations in a post [Wednesday]:

There's good reason to believe, based on economic theory and empirical experience, that at least some portion of that "lost" revenue would be recouped by higher GDP. But the overaching point is that the Ryan plan, as scored by the CBO, shows that there's a way to balance the long-term budget by keeping taxes at historical levels rather than raising them to levels that would cripple the economy. If critics acknowledge that Ryan's reforms to Social Security, Medicare, Medicaid, and the health care system can make our nation solvent as long as we maintain historical levels of tax revenue, and the only argument left is over how to maintain historical levels of taxation, then I'd say that's a major victory for Ryan.

The other charge critics make is that Ryan's tax changes would hurt the poor. That's the theme of a second report by the liberal Citizens for Tax Justice (CTJ), which concludes with this: "It's difficult to design a tax plan that will lose $2 trillion over a decade even while requiring 90 percent of taxpayers to pay more. But Congressman Ryan has met that daunting challenge."

It's impossible not to notice the snide tone. But sarcasm isn't always persuasive.The $2 trillion figure is a reference to the Bush tax cuts, which Ryan's plan would make permanent for everyone. (One should note that by this measure, the Obama tax plan will also "lose" some revenue, since the president only wants the tax cuts to expire for upper-brackets.) But Ryan also cuts spending over time. Obama does not.

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