Thu September 22, 2011
GOP Rep. Ryan On Obama's Plan: 'Why Would We Want To Do This Again?'
Originally published on Thu September 22, 2011 5:01 pm
Earlier this month on Morning Edition, Treasury Secretary Timothy Geithner made the case for President Obama's latest jobs plan, saying it "would have a substantial, powerful effect on strengthening the economy." Click here to read and hear his conversation with host Steve Inskeep.
Today, House Budget Committee Chairman Paul Ryan (R-WI) told All Things Considered host Michele Norris why he and other Republicans in Congress oppose the president's initiative.
Not only are Republicans against any tax increases, such as those the president would like to see on the wealthiest Americans, they also are against temporary tax credits and other short-term measures, Ryan said. What business executives tell him they want is certainty, the congressman said.
And though the administration has said the president's plan would be paid for thanks to some spending cuts, the closing of some tax loopholes and some tax increases, Ryan made the case that there would still be too much "borrowing and spending" in the package.
"If borrowing and spending in Washington was the secret to economic growth, we would have had it by now because we've done more of it than we have in the modern history of our country," he told Michele. "If this has proven not to work already ... why would we want to go do this again?"
In Ryan's view, Keynesian economics has been discredited and "for every dollar the government borrows and spends it does not necessarily translate into more than a dollar's worth of economic activity" because that also means a dollar has been "taken out of the private economy in the first place."
What's more, he argued, "all this extra government borrowing and spending ... is doing damage because it is adding more uncertainty" about the future of the nation's economy.
There are, though, things the president and Republicans do agree about, Ryan said, including the need to pass stalled trade agreements, reform the tax system and reduce government regulation.
Much more of Michele's conversation with the congressman is due on today's All Things Considered. Click here to find an NPR station that broadcasts or streams the show. Later, we'll add the as-broadcast version of the interview to the top of this post.
MICHELE NORRIS, Host:
Another source of political gamesmanship these days has been jobs and how to create them. President Obama recently unveiled his plan to jump-start the economy. We're going to hear reaction now from House Republican Paul Ryan of Wisconsin. The party increasingly turns to Ryan, the chair of the House Budget Committee, for guidance on economic policy, and he says there are a number of areas on which he and the president actually agree.
PAUL RYAN: Passing the trade agreements, doing tax reform at least on business taxation, albeit we would like to do it on the entire tax code, but he didn't include those ideas in his package. Job training, the budget we passed in April proposes to consolidate the 49 different job training programs from the federal government into career scholarships to go to individuals who were displaced, then go back to get training. Those are areas where we have some consensus and some agreement.
On the stimulus, we tried temporary tax rebates in the Bush administration a couple of times and in the Obama administration, and they simply didn't work to create economic growth and job creation. The other aspects of the package is basically more stimulus spending and more subsidies for state government budgets, which I would simply argue the federal government's budget is even worse shape than most state governments. And so what we want to do are pass ideas that have a better track record of actually growing the economy and creating jobs than going back and re-passing ideas that have recently proved not to work.
NORRIS: Now, Congressman, I know that there are people shaking their heads as they listen to you when you talk about these temporary tax measures in this administration and in the previous administration. Some would say that they did create jobs, perhaps not as many as you would like, but they did have a stimulative effect on the economy.
RYAN: Well, I think the evidence is pretty clear that they didn't have the kind of effect. All businesses are coming to Congress. They want certainty. What they're telling us is temporary tax rebates are not what they need to bring people back to work. And so the concern we have is that this temporary booster shot package the president has brought to Congress has already proven not to provide much boost, but more importantly, it actually comes at the expense of giving businesses certainty - certainty on regulations, certainty on taxes, on energy costs.
And so we need to go back and go at the fundamental foundations of economic growth, get those fundamentals right - certainty on regulations, on taxes, getting the debt and deficit under control, so that our interest rates are stabilized so that we don't have a fear of inflation. Those kinds of things are what we've passed in the House all spring and summer long, and we would love to see some movement on it.
NORRIS: Let me ask you about another area where it's not clear if there would be consensus. In an interview this weekend, Mr. Ryan, you criticized President Obama for attempting to raise taxes on the wealthiest Americans. You argue that more than half of Americans get their jobs from job creators who fall into those top...
RYAN: That's right.
NORRIS: ...tax rates. Well, the top marginal rate in this country has been at 35 percent since 2003. It's a remarkably low rate by historical standards, and yet, those same job creators that you're talking about have been cutting jobs for much of the past decade. So we're looking at an equation with low, low tax rates and still no jobs.
RYAN: Well, we had low unemployment until the crash in 2008. And so ever since the recession that - clearly we've had job losses. But look at where those tax rates are going. The top marginal income tax rate in current law, in 16 months, in 2013 is going to 44.8 percent. When you see the expiring provisions that are coming in law that the president has provided and the new health care taxes, an effective top tax rate of 44.8 percent, 50 percent of small-business income is taxed at the top two income tax rates.
Now, the president is saying he wants to throw an additional $1.6 trillion of tax increases on top of that amount. And the problem we have with this is since the majority of jobs come from successful small businesses who most of whom file as these individuals, we have to be mindful of the fact that if we tax our job creators in our small businesses a lot more than our foreign competitors tax theirs, they will win, and we will lose. And we are taxing our corporations, our small businesses at higher tax rates than our competitors are taxing theirs, with some exceptions.
Those businesses that have been really clever and very good at utilizing loopholes in the tax code tax more of their money but do it at a lower rate so that everybody can have lower rates, and small businesses won't be taxed at such an uncompetitive rate.
NORRIS: When you look at what's going on between, I guess, both ends of Pennsylvania Avenue, in part this is a war of ideas, but it's also a war of words. When President Obama recently argued for raising taxes on the wealthiest Americans, you and others accused him of engaging in class warfare. But as we've said the top marginal rate is at the lowest point in the past century. And while I can respect your right to argue that a tax hike is bad economics, why is that necessarily class warfare? And by declaring that this is class warfare, isn't that, in some ways, an act of class warfare?
(SOUNDBITE OF LAUGHTER)
RYAN: No. I really don't think so. First of all, just to clarify, this is not the lowest tax rates - 28 percent in 1986. Bipartisan tax reform, clear out the loopholes, lower the rates and the top tax rate was 28 percent. We are not at lowest tax rates we've ever had before.
Now, what do I mean when I say class warfare? I really do believe that the president's rhetoric is less aimed at appealing to hope and inspiration and more aimed at preying on people's emotions of fear, anger and anxiety. To me, what that does is it divides Americans.
I don't see the economic pie as somehow fixed, and therefore it is the government's role to redistribute the slices of the pie. What I want to do as a policymaker is grow the pie so that everybody can get some prosperity.
NORRIS: There is a lot of anxiety right now and a lot of uncertainty about the economy. Is it fair to say that your party has, at times, preyed on people's anxieties or amplified those anxieties, as well?
RYAN: Well, look, I think both political parties have demagogued each other. To me, that does a disservice. What I think is important is that we have leaders who see the problems for what they are, who offer real solutions and give people of this country a choice of which path they want for America.
NORRIS: In order to move the economy forward, at some point, both ends of Pennsylvania Avenue are going to have to start rowing in the same direction, working together. How would you characterize your relationship with the president? How often do you two talk and has it improved since what appeared to be a particularly low point earlier this spring?
RYAN: I can't say how our relationship is. We don't really talk ever, so I don't really have much of a relationship, but I'm not a person who really worries about such things. I'm a policymaker and I'm really not worried about personal relationships. I've only spoken to the president a handful of times over the years since he's been in office. Most of them have been on TV and probably two times that haven't been on TV and that's about it.
NORRIS: Paul Ryan is the congressman from Wisconsin's 1st Congressional District. He's the chairman of the House Budget Committee. Congressman Ryan, thank you very much for your time.
RYAN: You bet. Nice to be with you again, Michele. Transcript provided by NPR, Copyright NPR.