There seems to be a Democratic mole inside Mitt Romney’s campaign. Could it be Romney himself? Well, of course not. But considering the campaign’s behavior, it might just as well be. President Obama and his allies have cast Romney as a wealthy fat cat who’s out of touch with everyday Americans and who would use his presidency to enrich the already rich. To counter this damning image, the last thing you’d expect Romney to do is embrace a tax plan favoring the super-rich.
Which is exactly what he has done.
After examining Romney’s proposal, the nonpartisan Tax Policy Center concluded that households with incomes exceeding $200,000 would receive tax cuts; meanwhile, taxes would rise for the other 95 percent of the population. Taxpayers making more than $1 million would receive an average cut of $87,000; those making less than $200,000 would pay an average of $500 more. Romney denies that he would raise taxes on the middle class but has provided no evidence that the Tax Policy Center’s analysis is wrong.
What can he be thinking?
It’s not just that the politics are poisonous. The economics don’t make sense, either. Many wealthy Americans already have lower-than-average tax rates, because their incomes derive heavily from capital gains (profits on the sale of stocks or other assets) and dividends. These are taxed at a preferential 15 percent rate. Remember the ruckus over Warren Buffett and his secretary? Although the wealthiest 5 percent still pay about 40 percent of federal taxes, it’s questionable whether further reducing their tax burden would bolster the economy.
True, Romney’s basic approach is sound: lowering top rates and offsetting lost revenue by ending tax breaks. Romney would drop the top income tax rate from 35 percent to 28 percent and the lowest rate from 10 percent to 8 percent. This would improve incentives to work and invest. People would keep more of their last dollar of earnings. Reducing tax breaks would make the tax code less of a political candy store used to reward and penalize different groups and industries.
Just which tax breaks would be reduced, Romney hasn’t said. But he has made two decisions benefiting high-income Americans. The first is to repeal the estate tax, which in 2009 applied to only 0.6 percent of adult deaths and raised $21 billion. The second is to retain tax preferences for capital gains and dividends, costing an estimated $85 billion in revenue in 2013. So the wealthy would gain both from lower rates on ordinary income (wages, salaries) and from tax preferences heavily skewed toward them. To keep the package revenue-neutral — raising the same amount as today’s system — would require deeper cuts in middle-class tax breaks.
The political damage from this lopsided tax plan transcends its details. The central appeal of the Romney candidacy is that he would bring a competence to economic policy that would inspire the confidence needed to reinvigorate the recovery. The idea is to present a compelling contrast to Obama, whose low understanding of and meager sympathy for business seem plain and have arguably hobbled economic expansion.
Romney’s tax plan calls into question his claimed superiority. The plan seems crafted mostly to satisfy Republican constituencies, which fervently support ending the estate tax and keeping capital gains rates low. The campaign has pointed to a study claiming that Romney’s plan would increase the economy’s output by 5 percent, $750 billion at today’s prices, after five years. The projection seems a stretch — just numbers generated by a computer model — but it’s also irrelevant because the plan would be dead on arrival in Congress.
Under any circumstances, broadening the tax base by curbing popular breaks would be difficult. Huge constituencies benefit from the deductions for mortgage interest and charitable gifts. Other popular breaks include the income exclusion for employer-paid health insurance and tax credits for college tuition. To cut them so that taxes rise for the poorest 95 percent and fall for the richest 5 percent suggests a form of political suicide unappealing to elected officials.
What’s curious is that, with a few courageous tweaks, Romney could have presented a more credible plan. In 1986, Ronald Reagan supported eliminating the preferential rate for capital gains, which then remained at 28 percent from 1987 to 1997. The economy did fine. Romney might have emulated Reagan by proposing a top tax rate of 30 percent and an end to the capital gains and dividend preferences.
Indeed, these preferences may undermine the economy’s efficiency. Because low capital gains rates apply (illogically) to hedge fund and private-equity managers, we may have too many hedge and private-equity funds. If you subsidize something, you get more of it.
So Romney might have struck a blow for fairness, efficiency, simplicity — and political independence. Instead, he’s made a gift to Obama.
IT’S A MEASURE of how low the budget debate in Washington has sunk that President Obama’s advocacy of grossly inadequate revenue increases now stands as an outpost of responsibility.
Income-tax rate reductions that Congress enacted in 2001, 2003 and 2010 are scheduled to expire at the end of this year. Mr. Obama has said he’d like to extend these lower rates into 2013, except for the ones that apply to individuals earning more than $200,000 and couples earning more than $250,000. For those taxpayers, rates would return to 1990s levels.
We call this grossly inadequate because — as we’ve been saying since Mr. Obama irresponsibly promised during his first campaign that he would never raise taxes on the middle class — it’s impossible to tackle the federal debt by taxing only the wealthy. As the cost of retirement and health care for an aging population rises, the middle class is going to have to pay more, and federal benefits are going to have to be adjusted.
But Republicans want to extend all the rate reductions, regardless of the deficit, and some of the president’s fellow Democrats, spooked by GOP anti-tax rhetoric or persuaded by their wealthier donors, are equivocating. Some, including House Minority Leader Nancy Pelosi, have suggested redefining “well-off” to include every family earning less than $1 million per year, and extending the rate reduction for everyone below that level. This is a recipe for fiscal disaster — a disaster that will hurt society’s most vulnerable, because programs they depend on will be the first ones cut as federal borrowing costs rise.
The Dec. 31 deadline is setting up a tiresomely familiar game of political chicken. Everyone, including Federal Reserve Chairman Ben S. Bernanke, agrees that letting all the tax cuts expire at once would land a powerful punch on a weak economy, especially since a package of spending cuts worth $1.2 trillion over the next 10 years would take effect at the same time. But Democrats, led by Sen. Patty Murray (D-Wash.), are vowing to let all the rate reductions expire rather than extend them for upper-income brackets. Republicans are insisting they won’t compromise. No one even pretends compromise is possible before the election.
The intelligent response would be to agree on long-term revenue increases and spending cuts while softening the short-term blow. It would be dangerous to national security, as Defense Secretary Leon Panetta has argued (unsupported, thus far, by his commander in chief), to impose across-the-board budget reductions on the Pentagon.
Allowing those and all the other scheduled spending cuts and tax hikes could shrink the economy by about 3 per cent in the first half of 2013, at the cost of 1 million to 2 million jobs, the Congressional Budget Office estimated months ago. Given the deterioration in the economy since, that estimate might be optimistic.
But it would be even less responsible to extend all tax cuts indefinitely and revoke all spending reductions without any progress on long-term deficit reduction. It would cripple long-term economic growth, as the government’s financing needs drained capital from the private sector.
If the only way to achieve tax reform with a reasonable increase in revenue is to reset everyone’s rates at Clinton-era levels and then argue about which to reduce, that would be preferable to continuing on the road to catastrophe.
SENATE MAJORITY LEADER Harry Reid (D-Nev.) ambushed Mitt Romney the other day. In an interview with the Huffington Post, Mr. Reid claimed that he had been told by an unnamed investor at Bain Capital, the firm that Mr. Romney founded, that Mr. Romney had not paid any tax for 10 years.
“He didn’t pay taxes for 10 years!” Mr. Reid exclaimed. “Now, do I know that’s true? Well, I’m not certain.” The uncertainty didn’t stop Mr. Reid from repeating the claim on the Senate floor. Nor did it stop Mr. Reid from rendering a firm judgment. “I mean, you do pretty well if you don’t pay taxes for 10 years when you’re making millions and millions of dollars,” he said in the interview. Later, Mr. Reid said that he had “a number of people tell me that.”
If the senator has any proof, he owes it to Mr. Romney, the presumptive Republican presidential nominee, to put it on the record, now. Otherwise, Mr. Reid ought to pause and reflect on the record of another senator who once claimed to have a list of Communists and spies at the State Department — and could not substantiate it. Mr. Reid’s smear tactics are not unlike those of Joseph McCarthy and deserve equal condemnation. Even in the attenuated and superficial climate of today’s politics, Mr. Reid’s drive-by tactics repel. If he feels so strongly about disclosure, why hasn’t Mr. Reid made public his own tax returns? No need, he says, the Senate financial disclosure is sufficient.
Mr. Romney denies that he paid no tax. His 2010 return, and the estimate for 2011, show that he paid substantial taxes in those years. The Post’s Glenn Kessler points out that Mr. Romney’s investments are not structured to yield zero taxes, although there could have been one or two years with little or no payment. “I have paid taxes every year, and a lot of taxes, so Harry is wrong,” Mr. Romney said.
One way to prove it would be for Mr. Romney, a wealthy and successful businessman, to make public additional years of his tax returns. So far, he has steadfastly refused. There’s no formal requirement to reveal more, but Mr. Romney has deepened voter curiosity about why he won’t — and whether he has something to conceal. As long as he declines, the questions will persist.
So will the demands for disclosure of the identity of Mr. Romney’s well-connected campaign bundlers, to whom he is indebted for vacuuming up truckloads of cash. The candidate knows who they are but is not saying. President Obama is disclosing his bundlers, as did the past two Republican presidential nominees, George W. Bush (twice) and John McCain. On full disclosure, a vital principle of politics and governing, Mr. Romney’s approach is deeply troubling.
Why is it so hard for these two men to grasp that voters are rightly fed up with sleazy rhetoric and sleight-of-hand campaign finance?
THE 1996 WELFARE reform law wrought dramatic change. It reduced the rolls from 4.6 million families to 1.7 million by 2009. Child poverty rates fell and single-mother employment rates went up.
Mitt Romney and his campaign claim the Obama administration has gutted this landmark law. Says a 30-second ad paid for by the Republican National Committee: “Under Obama’s plan, you wouldn’t have to work and you wouldn’t have to train for a job. They just send you your welfare check. Welfare-to-work goes back to being plain old welfare.”
This is false. The disputed July 12 memorandum from the Department of Health and Human Services offers to waive certain provisions in the current law for states that want to try new methods of meeting the work requirement. Even if those waivers did “gut” the work requirement, the main pillars of reform — a fixed federal block grant to the states of $16.5 billion per year, a five-year lifetime limit on federally funded benefits and aggressive caseload reduction goals — would still stand. They would prevent a return to the bad old days of unconditional, lifelong welfare dependency. Of course, given the states’ budget woes, it’s a mystery why any governor would seek to do that in the first place.
Mr. Romney’s sloppy, hyperbolic attack is doubly unfortunate given that welfare was historically a racially fraught issue that reform defused. He and other critics are on firmer ground, however, when they question HHS’s authority to change welfare policy, sweepingly or modestly, through a mere executive-branch memorandum.
There’s a history here. The 1996 reform effectively ended debate on whether to require work; but arguments over exactly what activity counts as work, and how to measure or monitor it, raged on. Competing experts dispute whether it’s more effective to move beneficiaries immediately into a job — the “work first” approach — or to allow more time for education, training or substance-abuse treatment – “human capital development.”
When Congress reauthorized welfare reform in 2005, it took into account data supporting “work first” — as well as a Government Accountability Office report showing that some beneficiaries were getting work credit for dubious activities such as journaling. As a result, the measure, which President Bush signed, included more specific work definitions, coupled with stricter reporting requirements for the states. Additionally, it told states that they would be held accountable for keeping caseloads below the 2005 level, not the 1996 level, as the previous law did.
States chafed at the new norms, arguing that the administrative burdens made it hard to meet the ambitious new caseload reduction norms. There is some evidence that they’re right. But Congress has failed to agree on a new version of the law, so the 2005 version has been repeatedly extended.
Broadly speaking, the HHS memo embodies a policy approach that critics of the 2005 changes advocated before Congress during the most recent reauthorization attempts, but which Congress, for better or worse, did not adopt. It emphasizes experiments with “human capital”-like approaches — reflecting the new administrative reality in the states and recent evidence from pilot projects in Portland, Ore.
It might work; or, as the more responsible critics fear, waivers might dilute the strong pro-work incentives under existing law. We can’t really know until an actual waiver gets granted and a project runs its course. Either way, HHS’s legal justification — that the secretary’s authority to waive state reports on how to meet the work requirement also permits her to let states redefine the work requirement — strikes us as hard to square with Congress’s intent.
Obama the candidate emerges on Colorado trip, with political ferocity
By Scott Wilson
Updated: Friday, August 10, 4:45 AM
The Washington Post
PUEBLO, Colo. — The fact President Obama is spending two full midsummer days here in Colorado, hopping from event to event as if the election were next week, tells you all you need to know about the state: It is one he wants badly to win.
There are other paths to the 270 electoral votes Obama needs to secure a second term. But the one that runs through Colorado and its nine coveted electoral votes is a bit smoother than the ones that run around it.
“If we win Colorado,” Obama told a crowd chanting “four more years” in Denver on Wednesday, “we’ll get those four more years.”
Over the past two days, Obama the candidate has emerged with a ferocity that many who watched him on the trail four years ago say recalls those days.
The cool presidential demeanor has been shed along with his suit coat out here on hot afternoons, and in its place has emerged an intensely competitive politician who seems to be beginning to take the possibility of defeat in November a bit personally.
The hallmarks of Candidate Obama are increasingly apparent.
There is his easy conversational engagement with his friendly audiences; the partisanship laced through his stump speeches that skewers, but without the same sting it seems to have when delivered in Washington; and the personal energy that many of his 2008 supporters worried had gotten lost somewhere along Pennsylvania Avenue since the last election.
To win here in a state very much up for grabs, Obama must maximize his appeal to Colorado’s growing Hispanic population, energize its liberals interested in such issues as alternative energy and women’s reproductive rights, and get first-time voters registered and to the polls on Election Day. It is no small task — hence, a pair of days in Colorado’s blistering heat to make his pitch, again and again.
His itinerary here — his ninth visit to the state since taking office — has told that story.
Obama opened with an event Wednesday on a college campus in Denver emphasizing women’s health — to an audience composed mostly of women — and the protections for it contained in his health-care law. On this trip, he has claimed “Obamacare,” a Republican epithet, as unabashedly his own to gleeful receptions from supporters.
Then he flew into red-tinted Grand Junction, where he delivered a tub-thumping message of economic populism to his Democratic audience, who had been warned by Obama volunteers in their introductions not to fear the “ostracism” that comes with working on the president’s behalf in a region that voted against him last time.
“If you believe that we’re on the right track,” Obama told the audience to applause, “if you think, like I do, that we’ve come too far to turn back now, then I’m going to need you, Colorado.”
On Thursday, Obama emphasized in a pair of events alternative energy tax credits, important here in wind-farm rich Colorado, where an estimated 5,000 jobs depend on the growing industry. The state has set a goal requiring that 30 percent of its electricity come from renewable sources by 2020.
Obama believes that alternative-energy promotion policy, criticized by Republicans as a waste of taxpayers’ money, is helping develop an industry in which many of the country’s future jobs will emerge.
His administration has also made missteps, most notably in the case of the California solar-panel manufacturing firm Solyndra, which declared bankruptcy after receiving a $527 million federal loan.
Here in Pueblo, in a hall on the state fairgrounds, where live mariachi bands warmed up the crowd of 3,500, chants of “Si se puede” rang out as they did four years ago, when Obama, then a long shot, got bilingual reassurance that victory was possible.
After taking the stage to the sounds of U2, Obama told the audience that his Republican rival Mitt Romney has pledged to end the alternative-energy tax credit, potentially costing the state thousands of jobs.
He tied it to his larger economic message — one that on the stump he has boiled down to a “middle out, bottom up” approach to growth that he favors vs. a “top down” policy that he says Romney is promoting.
“Colorado, it’s time to stop spending billions of dollars each year on subsidies for an oil industry that is already doing pretty well,” Obama said to cheers, saying the money should instead be invested in developing alternative energy sources.
And he championed the DREAM Act, legislation that would give immigrants who arrived in the country illegally as minors a way to achieve residency. The audience, many Latinos among them, screamed its approval.
“I’ve been out spent before, I’ve been counted out before,” Obama told the audience. “But what we learned in 2008 is that when American people want change they make it happen.”
In a statement of response, Ryan Williams, a Romney campaign spokesman, said Obama’s “policies have devastated the middle class, resulting in higher unemployment, lower incomes, and greater uncertainty about the future.”
“Only one candidate in this race is going to raise taxes – and that’s Barack Obama,” Williams said.
Sharp and sometimes even teetering on the edge of anger, Obama nonetheless is delivering a message in Colorado and elsewhere on the stump that is, at its heart, optimistic. His speech is set up as part explanation, part rationale for why he is running again and why he believes he deserves to win.
As he did here, Obama tells crowds that, despite Republican claims that he has overseen an American decline, “there isn’t a country in the world that wouldn’t trade places with the United States.” It is a happy nationalism that his audiences these past two days have cheered.
“We have less than three months left until this election. Time is flying,” Obama told the crowd, warning of the millions of dollars in negative ads to come over that time.
“That may be a strategy to win the election,” he continued, “but it can’t hide the fact that they don’t have a plan.”
After Pueblo, Obama headed to Colorado Springs, another of the state’s red zones, where he spoke among a stand of tall pines to more than 4,000 people gathered on a campus green at Colorado College. His themes were the same, as was his tone, and he turned again to his latest laugh-line description of Romney’s economic plan as “trickle down, tax cut fairy dust.”
Next week Candidate Obama will be back in Iowa, another swing state that helped launch him to the presidency four long years ago and where, again, he will be asking for help to keep his job.
In key swing state Florida, Paul Ryan a virtual unknown
By Stephanie McCrummen
Updated: Monday, August 13, 9:27 AM
The Washington Post
ST. AUGUSTINE, Fla. — A conservative rock star in the marbled halls of Congress, Paul Ryan — his ideas, his politics, his very name — was just barely beginning to register at the Spot Cafe off State Road 16 here Sunday.
Rick Paul, said one diner, was a brilliant vice presidential choice. Mike Ryan, said another, would surely boost Mitt Romney’s presidential campaign and help “save the country.” At last, said Jim Smith, 74, Romney made a decision that solidifies his conservative credentials.
"Paul — from Kentucky?” Smith said, referring to the junior Kentucky senator, Rand Paul. “Definitely a good move. I didn’t support Romney in the primary, but I will now with Paul in there.”
And so it went Sunday in the crucial swing state of Florida, in the GOP stronghold of St. John’s County, and just down the bright gray highway from where the presumptive Republican presidential nominee is scheduled to campaign Monday without his vice presidential pick, the man named Paul Ryan, 42, a congressman from Wisconsin.
A rising player among conservatives in Washington, Ryan was only vaguely familiar to the breakfast crowd at the Spot Cafe, where diners were mostly older than 50, representing a critical demographic Romney needs to win Florida.
“I know nothing about that gentleman,” said Stuart Joseph, 79, heaping sugar into his coffee.
And about Ryan’s plan to cut the federal budget?
“Nothing,” Joseph said, stirring.
About Ryan’s plan to restructure Medicare?
“Nope,” Joseph said, sipping.
Ryan’s relative obscurity here stands in contrast to the large crowds that greeted him and Romney at campaign stops this weekend in Virginia and North Carolina, and to pundits already speculating about whether Ryan will motivate Romney’s conservative base or spook baby boomers and seniors across Florida with his Medicare plan.
“Paul Ryan’s his name?” asked Floyd Register, 62, a county worker who hasn’t quite decided who he will vote for in November.
And so, TV and radio advertising in Florida for the next three months is likely to be relentless: President Obama’s campaign will cast Ryan’s proposal as the death knell of Medicare, and Romney will cast it as the program’s only salvation.
For Romney, the process launched Sunday, when he and Ryan, whose mother is on Medicare in Florida, appeared on CBS’s “60 Minutes” and introduced Ryan’s proposal as one that will save Medicare for future generations.
“You’re going to have to do a little selling,” reporter Bob *Schieffer said to Romney, a point that diners underlined Sunday.
Told in general terms that Ryan’s plan would restructure Medicare for future generations of seniors, Register said that he would need to know more details before deciding whether it would affect his vote.
“It’s the unknowns” that concern him, he said.
At another table, Lorina Johnston, 54, said she heard the name Paul Ryan for the first time Saturday, and immediately went online to find out more about him, looking at Fox News, MSNBC, ABC and other Web sites.
Although she is leaning toward Romney, Johnston, who is being treated for breast cancer, said that Ryan’s Medicare proposal “does make you a little nervous.”
Asked whether the prospect of changing Medicare could sway her from voting for Romney, she said, “It could.”
A recent survey conducted by The Washington Post and the Kaiser Family Foundation found that 58 percent of Americans want Medicare left alone, but there is no fresh polling data on how that question plays in Florida.
For the most part, the breakfast crowd at the Spot seemed to be a Romney crowd, and even those who had never heard of Ryan imagined he could do little to dissuade them from voting Republican, even changing Medicare.
Once he understood that the vice presidential candidate was Paul Ryan and not Rand Paul, and that Ryan had a proposal to change Medicare, Jim Smith shrugged it off.
“I’m so negative on Obama,” Smith said, explaining that he would vote for Romney no matter what.
There were a few Sunday who knew exactly who Paul Ryan was, and who were glad to see that Romney had chosen him as his vice presidential running mate. They were eating eggs and French toast at table near the window, debating whether Ryan’s Medicare proposal, which they supported, was a winning campaign theme.
“It has to be sold. . . . Romney needs to get the word out about it and not run from it,” said Leny Pearson, 41, who works in marketing. “We can’t just keep on avoiding it.”
His dining companion, David Larry, was not so sure that the country was ready for that complex discussion.
“That won’t get him elected,” said Larry, 80, a retired engineer. “Getting him elected is the key. We can be policy wonks later.”
A few tables over, Gene Johnson, 73, and his friend Doug, 70, who did not want to give his last name, agreed that Romney’s campaign will have a tough time selling Medicare reform in Florida.
But they say that addressing the country’s fiscal issues is critical. And they have faith that Romney’s vice presidential pick is up to the task of explaining his Medicare proposal to voters.
“The thing about Romney is, he’s on the up and up,” Doug said. “Whether it’s popular or not, he and Mike Ryan are out to save the country.”
“Yep, I think Rand’ll do all right,” said Johnson, referring to the Kentucky senator.
When, in his speech accepting the 1964 Republican presidential nomination, Barry Goldwater said “extremism in the defense of liberty is no vice” and “moderation in the pursuit of justice is no virtue,” a media wit at the convention supposedly exclaimed, “Good God, Goldwater is going to run as Goldwater.” When Mitt Romney decided to run with Paul Ryan, many conservatives may have thought, “Thank God, Romney is not going to run as Romney.”
Not, that is, as the Romney who 12 months ago, warily eyeing Iowa, refused to say a discouraging word about the ethanol debacle. Rather, he is going to run as the Romney who, less than two weeks before announcing Ryan, told the states — Iowa prominent among them — that he opposes extending the wind energy production tax credit, which expires soon.
This may seem a minor matter, as well as an obvious and easy decision for a conservative. The wind tax credit is, after all, industrial policy, the government picking winners and losers in defiance of market signals — industrial policy always is a refusal to heed the market’s rejection of that which the government singles out for favoritism. But ethanol subsidies also are industrial policy. And just a few days after Romney got the wind subsidy right, more than half of the 11 Republican senators on the Finance Committee got it wrong, voting to extend it. So even before choosing Ryan, Romney was siding with what might, with a nod to Howard Dean, be called the Republican wing of the Republican Party. For Romney, conservatism is a second language, but he speaks it with increasing frequency and fluency.
Romney embraced Ryan after the sociopathic — indifferent to the truth — ad for Barack Obama that is meretricious about every important particular of the death from cancer of the wife of steelworker Joe Soptic. Obama’s desperate flailing about to justify four more years has sunk into such unhinged smarminess that Romney may have concluded: There is nothing Obama won’t say about me, because he has nothing to say for himself, so I will chose a running mate whose seriousness about large problems and ideas underscores what the president has become — silly and small.
He on whose behalf the Soptic ad was made used to dispense bromides deploring “the smallness of our politics” and “our preference for scoring cheap political points.” Obama’s campaign of avoidance — say anything to avoid the subject of the country’s condition — must now reckon with Ryan’s mastery of Obama’s enormous addition to decades of governmental malpractice.
Obama is, by now, nothing if not predictable, so prepare for pieties deploring Ryan’s brand of “extremism” that has supplanted responsible conservatism. Goldwater, quoted above, infuriated the sort of people who, regardless of what flavor of conservatism is in fashion, invariably purse their lips and sorrowfully say: “We think conservatism is a valuable thread in our national fabric, etc., but not this kind of conservatism.” Goldwater’s despisers did not recognize his echo of words by Martin Luther King Jr. 15 months earlier.
In his “Letter From Birmingham Jail,” King wrote, “You speak of our activity in Birmingham as extreme. . . . But though I was initially disappointed at being categorized as an extremist, as I continued to think about the matter I gradually gained a measure of satisfaction from the label. Was not Jesus an extremist for love. . . . Was not Amos an extremist for justice. . . . Was not Paul an extremist for the Christian gospel. . . . Perhaps the South, the nation and the world are in dire need of creative extremists.”
Remember this episode when you hear, ad nauseam, that Ryan is directly, and Romney now is derivatively, an extremist for believing (a) that “ending Medicare as we know it” will be done by arithmetic if it is not done by creative reforms of the sort Ryan proposes, and (b) that the entitlement state’s crisis cannot be cured, as Obama suggests, by adding 4.6 points to the tax rate paid by less than 3 percent of Americans.
When Ryan said in Norfolk, “We won’t replace our Founding principles, we will reapply them,” he effectively challenged Obama to say what Obama believes, which is: Madison was an extremist in enunciating the principles of limited government — the enumeration and separation of powers. And Jefferson was an extremist in asserting that government exists not to grant rights but to “secure” natural rights that pre-exist government.
Romney’s selection of a running mate was, in method and outcome, presidential. It underscores how little in the last four years merits that adjective.
The striking thing about Paul Ryan’s ascent is the gulf between his proposals and the way the media have characterized them. Since Mitt Romney named Ryan to the ticket on Saturday, the news has been filled with talk of the “ fiscal conservative ” (NPR) “ intent on erasing deficits ” (New York Times) who has become “ the intellectual heart of the Republican Party’s movement to slash deficits” ( The Post). All of this is demonstrably false. Ryan’s con has succeeded largely because Democrats haven’t sensed the political salience of assailing his plans from the right ; instead, they’ve chosen to slam only Ryan’s regressive priorities and Medicare scheme.
This strategic error allows the presumption that Ryan, and thus Romney, are the true apostles of fiscal responsibility in this race, a value important to the voters who will decide November’s outcome. But the con has worked in part because budgets make journalists’ eyes glaze over, and once the phony Ryan meme took hold two years ago it became hard to dislodge.
Now that Ryan is on the ticket, however, the stakes are too high not to expose the fraud. In that spirit (and at the risk of taxing readers who’ve heard my Ryan fetishes before), I offer one wonk’s guide to what every citizen should know about Ryan’s plans. Otherwise, like the talented Mr. Ripley, Ryan will continue to get away with (fiscal) murder.
Ryan is not a “fiscal conservative.” A fiscal conservative pays for the government he wants. Ryan never has. His early “Roadmap for America’s Future” didn’t balance the budget until the 2060s and added $60 trillion to the national debt. Ryan’s revised plan, passed by the House in 2011, wouldn’t reach balance until the 2030s while adding $14 trillion in debt. It adds $6 trillion in debt over the next decade alone — yet Republicans had the chutzpah to say they wouldn’t raise the debt limit! (I remain mystified why President Obama never hammered home this reckless contradiction by insisting that the GOP “raise the debt ceiling just by the amount it would take to accommodate the debt in Paul Ryan’s budget.”)
Ryan is an extreme “small government conservative.” Ronald Reagan ran government at 22 percent of gross domestic product when our population was much younger. Ryan and Romney want to run government at 20 percent of GDP even as the number of Americans on Social Security and Medicare doubles. Even if we slow these programs’ growth, it’s impossible to shrink the federal role in an aging society this sharply without eliminating vast swaths of what Americans have come to expect from government — not to mention shortchanging already lagging investments in research and development and infrastructure. Over time, Ryan’s “vision” would decimate most federal activities beyond Social Security, Medicare and defense.
When I asked Ryan last October why he thought — in his words — “the historic size [of government as a share of GDP], or smaller,” was sound policy when we’d shortly be doubling the number of seniors on the biggest federal programs, he replied, “Because we can’t keep doing everything for everybody in this country.”
Ryan says that on our current path we will “transform our social safety net into a hammock, which lulls able-bodied people into lives of complacency and dependency.” But I’ve never understood what hammock Ryan is talking about. If programs for seniors haven’t been a “hammock” until now, simply doubling the number of people eligible for them can’t turn them into a “hammock” tomorrow. We have an aging population challenge and a health-cost challenge. We don’t have a “hammock” challenge.
Ryan is not a truthteller. Ryan boasted on Saturday that he and Romney have “the courage to tell you the truth.” But political courage means telling your base things they don’t want to hear. The truth Ryan and Romney won’t tell — which explains the staggering debt in Ryan’s plan — is that taxes need to rise as the boomers retire. (The truth Democrats won’t tell is that raising taxes on the rich alone won’t suffice.)
But on Medicare. . . I can hear the Democratic groans coming, but Ryan deserves credit here. Ryan leaves Medicare on its current outsized trajectory for the next decade, as spending soars from $560 billion to $950 billion. Because of our uniquely inefficient health-care sector, which leaves us spending twice per capita what other wealthy nations spend, the voucher he calls for thereafter would suffice to buy seniors terrific care everywhere but here. Even if his approach is imperfect, Ryan is right to challenge our Medical Industrial Complex to change.
So, Democrats, if you must demagogue (and I know you must), I say: Demagogue responsibly. Blast the GOP for trimming Medicare growth to cut taxes for the rich — but don’t damn the idea of slowing Medicare’s growth “the right way.” In a few years the cash going to Medicare that’s not needed for quality care will be the reason we’re too strapped to invest in poor kids.
If Paul Ryan were a liberal, conservatives would describe him as a creature of Washington who has spent virtually all of his professional life as a congressional aide, a staffer at an ideological think tank and, finally, as a member of Congress. In the right’s shorthand: He never met a payroll.
If they were in a sunny mood, these conservatives would readily concede that Ryan is a nice guy who’s fun to talk to. But they’d also insist that he is an impractical ideologue. He holds an almost entirely theoretical view of the world defined by big ideas that never touch the ground and devotes little energy to considering how his proposed budgets might affect the lives of people he’s never met.
In making Ryan his running mate, Mitt Romney guaranteed that this election will be about big principles, but he also underscored a little-noted transformation in American politics: Liberals and conservatives have switched sides on the matter of which camp constitutes the party of theory and which is the party of practice. Americans usually reject the party of theory, which is what conservatism has now become.
In the late 1960s and ’70s, liberals ran into trouble because they were easily mocked as impractical ideologues with excessive confidence in their own moral righteousness. They were accused of ignoring the law of unintended consequences and of failing to look carefully at who would be helped and who’d be hurt by their grand schemes.
Since I’m a liberal, I’d note that these criticisms were not always fair. Many of the liberals’ enduring achievements — from civil rights to environmental laws to Medicare — grew from the boldness their confidence inspired. But, yes, there was arrogance in liberalism’s refusal to take conservatism seriously.
Conservatives, in the meantime, gained ground by asking tough and practical questions: Will this program work as promised? Does it bear any connection to how the world really works? And, by the way, who benefits?
Now, it is liberals who question conservative master plans and point to the costs of conservative dreams. And in Ryan and his budget proposals, they have been gifted with the perfect foil.
How can Ryan justify his Medicaid cuts when, as the nonpartisan Kaiser Family Foundation found, they would likely leave 14 million to 19 million poor people without health coverage? How can he justify tax proposals that, as The New Republic’s Alec MacGillis pointed out, would reduce the rate on Mitt Romney’s rather substantial income to less than 1 percent? How can he claim his budgets are anti-deficit measures when, as The Post’s Matt Miller has noted, his tax cuts would add trillions to the debt and we wouldn’t be in balance until somewhere around 2030?
For Ryan, such questions (and many others arise) are beside the point because his purposes are so much grander. “Only by taking responsibility for oneself, to the greatest extent possible, can one ever be free,” he wrote in the introduction to his “A Roadmap for America’s Future” in 2010, “and only a free person can make responsible choices — between right and wrong, saving and spending, giving or taking.”
This is close to the definition of freedom offered by Ayn Rand, Ryan’s one-time philosophical hero, in her book, “The Virtue of Selfishness.” Ryan didn’t quote Rand, but as the New Yorker’s Ryan Lizza observed, he did cite a lot of intellectuals, including Milton Friedman, Adam Smith, Max Weber, Émile Durkheim and Georges-Eugène Sorel. Didn’t conservatives once dismiss this sort of thing as “a term paper”?
None of this takes away from Ryan’s charm or seriousness. My one extended experience with him came seven years ago, when I moderated a thoughtful and exceptionally civil discussion about politics between Ryan and his liberal Wisconsin colleague Tammy Baldwin. Both were impressive, and the encounter brought home to me why Ryan is personally popular. He is great to engage with and really believes what he says.
But the issue in this election will be how Americans want to be governed. Republicans mock President Obama for still thinking like the professor he once was, yet in this race, Obama — far more than today’s conservative theorists and to the occasional consternation of his more liberal supporters — is the pragmatist. He’s talking about messy trade-offs: between taxes and spending, government and the private sector, dreams and the facts on the ground. In embracing Ryan, Romney has tied himself to the world of high conservative ideology. As liberals learned long ago, ideology usually loses.
The selection of Paul Ryan — chairman of the House Budget Committee — as Mitt Romney’s vice presidential candidate has the potential to turn this dreary presidential campaign into a meaningful debate over the size and role of the federal government. It could also (sadly) litter the debate with so many exaggerations, distortions and falsehoods that Americans end up less informed and less able to make sensible choices.
Until now, the campaign has been a disheartening descent into a swamp of negative ads and personal character attacks that, if hardly unprecedented, seem unusual in that they’re increasingly made by the candidates themselves. Any semblance of a reasoned debate over the nation’s future has been conspicuously absent.
It can be observed: The candidates are trying to win; they’re not conducting a civics class; it has always been thus.
There never was a “mythic gold age” of campaigns, historian Gil Troy of McGill University writes in the current Wilson Quarterly.
As campaigns became more democratic, they became less informative, he says. In the 19th century, election days were already “mass carnivals, capping months of squabbling, pamphleteering, parading, speechifying, [and] mudslinging.” The “aspects of the campaigns that Americans hate reflect the democracy we love,” Troy argues.
Obama’s and Romney’s resort to personal attacks has reflected standard political logic: It beats the alternatives. Obama can’t run on his record, because his record isn’t strong. Payroll jobs remain 4.8 million below their pre-recession peak. The Affordable Care Act (Obamacare) — his singular legislative achievement — isn’t popular; it is disliked by 44 percent of the public and liked by only 38 percent in the latest Kaiser Family Foundation poll. For his part, Romney has so far failed to paint a compelling vision for the United States. He’s campaigned mostly on Obama fatigue.
The selection of Ryan potentially alters this logic.
More than anyone in Congress, Ryan is identified with a basic reappraisal of the federal government. He has proposed a sweeping budget plan for reducing projected spending. Liberals hate Ryan’s plan, arguing that it would shred the safety net and cut deeply into many programs. Conservatives love it for coming to terms with the nation’s future. Politically, both sides may welcome the debate because each thinks it has the winning argument. Obama will accuse Romney of gutting government, especially Medicare, Romney will retort that Obama ensures top-heavy government and sluggish economic growth.
A genuine debate is long overdue. The framework for government’s expansion since 1960 has broken down. Its political appeal was that we got more government (from food stamps to Medicare to Pell grants) without a parallel increase in tax burdens. In 1960, federal taxes were 17.8 percent of the economy (gross domestic product); in 2007, before the financial crisis, they were only 18.5 percent of GDP.
Two bits of good fortune enabled this something-for-nothing swelling of government: First, annual economic growth averaged slightly more than 3 percent; second, defense spending declined as a share of the budget — in effect, lower defense spending financed higher social spending. Both props are gone.
Even with a full recovery from the Great Recession, economic growth is sinking toward 2 percent annually. The main cause is the impending retirement of baby-boom workers, which will stunt growth in the labor force. As for defense, past reductions mean that present cuts don’t permit much other spending. In 1970, defense was 42 percent of federal outlays; in 2011, even with the war in Afghanistan, it was 20 percent.
Combined with the surge of baby-boomer retirees, which will increase Social Security and Medicare spending, these trends have shoved governmental accounts massively out of balance. There would be huge deficits even had there been no Great Recession. The fact that there was adds complexity, because overzealous cuts might imperil the recovery.
“America’s presidential campaign process works,” argues Troy, the historian. “It sifts through candidates, facilitates a continent-wide conversation and, most important, bestows legitimacy on the winner.”
Up to a point, this is convincing. The grueling, prolonged campaign reveals character, values, temperament and political competence — the ability to connect with people, respond to unanticipated events and exert leadership. But it’s unclear how well the present campaign will serve its most important role after anointing a victor: conferring legitimacy.
It’s impossible to close long-term budget deficits simply by taxing the rich and cutting defense (liberal dogma) or eliminating “waste” and “unneeded” spending (conservative dogma). The “conversation” conducted by Obama and Romney needs to conform to economic and budget realities. If it doesn’t, Americans will discover after the election that they’ve been had.
The question hovering over this election — and over American democracy — is whether our leaders can navigate the fundamental political change. For half a century, government bestowed benefits on masses of citizens. Now, it must revoke benefits or raise taxes. Ryan provides the question, though not the answer.