When Paul Ryan was chosen as Sen. Mitt Romney’s running mate for the Republican ticket in the 2012 presidential race, he was known as a policy wunderkind. His focus on deficits and entitlement reform were the bread and butter of the GOP’s policies.
But then, after Donald Trump won the presidency in 2016, Ryan’s brand of fiscal conservatism fell out of favor, replaced by a more populist economic message under Trump — although the two did unite to pass tax reform before Ryan resigned as House Speaker in 2018.
Now, in 2022, the members of Congress elected as part of the GOP’s “thin” Republican majority in the U.S. House of Representatives will need to decide if they are going to go the way of Trump or Ryan as they choose what policies they want to try to tackle before the 2024 elections.
Ryan is betting the GOP is still open to his small-c conservative message. He just helped write a book, along with 18 mostly American Enterprise Institute scholars, titled American Renewal. They make the case that conservatives should rein in spending in Washington D.C. — including by making changes to Medicare and Social Security.
“America emerged from the 20th century as the world’s sole superpower. We created a material prosperity that the world had never seen before,” he said at the book launch event at the institute on Thursday. “But we are now facing enormous political and economic challenges, both from within and without.”
If lawmakers continue to delay cutting spending they will likely face more difficult decisions later, he said, like pressure to raise taxes, to cut Social Security and a “hollowed-out military.”
.@SpeakerRyan: "What we’re trying to prevent is austerity and root canal economics. What these reforms do is make these programs work better by using what we’ve learned in the private sector in the 21st century so that we can have an age of American renewal and prosperity."— American Enterprise Institute (@AEI) November 17, 2022
For years, low inflation gave Washington lawmakers a false sense of security that they could continue to run high deficits. But this year, with inflation high and interest rates inching up, the government has had to pay more for the money it borrows, just like everyone else. Ryan says in the introduction to the book that this spending has put the country on a “collision course” that could lead to “economic devastation.”
“Predicting at precisely what point a huge debt — and running high deficits — will catalyze an economic disaster is inherently difficult and speculative, in part because of the United States’ unique economic status, including holding the world’s reserve currency,” he writes. “Yet the U.S. cannot forever defy the laws of economic gravity.”
The Congressional Budget Office has warned that the country’s economy is expected to grow at a much smaller rate because of its debt, which could lead to stagnation similar to what Japan has experienced, he writes. Low wage growth for poorer Americans has made it difficult for them to rise out of poverty, and the mixture of government programs that make up the social safety net are hard to navigate and aren’t necessarily designed well, so they don’t have the desired effect of making people’s lives better, he says.
If they want to see these policies enacted, the task for Ryan, co-editor Angela Rachidi, a senior fellow at the institute, and the other scholars who contributed to the book is to convince Americans and policymakers that the situation is so dire that they have to take these politically difficult measures or else things could get much worse down the road.
Tackling Social Security and Medicare reform has long been considered the “third rail” of American politics. And some Republicans have argued that Romney and Ryan positioning themselves as deficit hawks during their presidential run was not a winning message.
But high inflation and a slowing economy should be a “reality check” that gives policymakers pause, said Rachidi in an interview with Deseret News.
“What we’re trying to accomplish with this book is to say this is not the way you should be running the world’s largest economy,” said Rachidi. “You can’t just keep raising taxes and running high deficits without negative consequences.”
🚨JUST RELEASED@AEI scholars offer serious policy solutions to some of the biggest challenges facing America today in a new volume edited by @SpeakerRyan and @AngelaRachidi.— AEI Economics (@AEIecon) November 17, 2022
Here are what some of AEI's economics and health care scholars contributed...🧵https://t.co/QTYNXVKzLD
Without some reform, the U.S. is on an unsustainable course that will ultimately harm economic productivity and growth, which will make it harder for the nation to sustain spending on programs like Social Security and Medicare, she said. And the people who that would hurt are our most vulnerable citizens who depend on these programs, she said.
“If we can head off that crisis, then we can shore up entitlement programs and the safety net so they can be available to the populations that need them,” she said.
The policy proposals in the book include:
- James Capretta, a senior fellow in health care policy at the American Enterprise Institute, suggests Medicare reforms should include reducing complexity of the plans, price transparency, standardized rules for what is being priced and allowing consumers to share in cost savings when they choose lower-priced options.
- Andrew Biggs, a senior fellow at the institute, says to fix Social Security’s $18 trillion long-term funding shortfall, benefits should be scaled back for middle- and high-income retirees, while he also suggests private sector retirement plans should potentially be made mandatory.
- Richard Burkhauser, a non-resident senior fellow at the institute and emeritus public policy professor at Cornell University, suggests Social Security Disability benefits should be reformed to encourage work among those who are able.
- Rachidi and institute senior fellows Matt Weidinger and Scott Winship say poverty reduction tax policies should encourage marriage and focus on getting people to work.
- Naomi Schaefer Riley, a resident fellow at the institute and a Deseret News contributor, writes that the federal government should require better data on child safety and foster care, and that children should have multiple options for placement.
- Max Eden, an education research fellow at the institute, says early childhood education should re-center family as the primary caregiver, and that families should be given education savings accounts, or vouchers, to help them deliver early childhood care and education to their children.
- Frederick Hess, director of the institute’s education policy studies, writes conservatives should defend the idea of academic rigor and excellence, and should give parents options for their children through school choice.
- Abby McCloskey, an economist, makes the argument that conservatives should support a paid family leave policy that covers six to eight weeks of lost wages for parents after they have a child, whether funded through child tax credits or Social Security.
In addition, chapters on tax reform say the tax code should be simplified and tax rates should be reduced, including for businesses.
It remains to be seen if Republicans in the House and Senate will feel emboldened enough to tackle entitlement reform. But Rachidi said if they don’t, they may put their other interests at risk.
“If we don’t address this fiscal cliff then we won’t be able to fund our priorities, like funding education for the next generation,” she said. “We don’t want to jeopardize our standing in the world.”