Mika Brzezinski: Joining us now from Capitol Hill Paul, Republican Congressman from Wisconsin and Chairman of the House Budget Committee, Representative Paul Ryan, who we like very much.
Joe Scarborough: He has made tough choices. You cannot say Paul Ryan has not shown courage.
Mika Brzezinski: He has shown courage.
Congressman Ryan: The feeling is mutual.
Mika Brzezinski: Paul, are there no tax modifications that you could sell to your base for the sake of your ultimate goal and the country—and that is to save trillions of dollars and avoid a default?
Congressman Ryan: Mika, take a look at our budget, and I think you've read our budget, we've proposed a deal. We say, let's go after all these loopholes to lower tax rates to clean up our tax code.
Look GE made a lot of money, but paid no taxes. UPS, another big company, paid a 34 percent tax rate while their competitors overseas paid something like 24 percent. Something's wrong with our tax system. It's making us uncompetitive. The Republican budget says, clear out all these loopholes, to lower rates, to provide for economic growth. We do agree with loophole closing. We don't want to make it a situation where it's used not to cut spending or to take pressure off spending cuts, but to fix our tax code to grow the economy.
You've got to deal with spending; that's the big issue Mika. Putting taxes aside, if we don't start getting spending under control, we will have a debt crisis. We see what happens with those things by looking at what's going on in Europe. We don't want those kinds of problems here. Spending is the problem and that's what we want to keep focused on.
Mika Brzezinski: Okay, that sounds reasonable.
Joe Scarborough: Very reasonable.
Mika Brzezinski: Now what about some of those tax loopholes being closed and other modifications to the tax code to raise money to put against the debt? Would that be okay?
Congressman Ryan: Well that's what I was just talking about. See the thing is, we believe tax reform is a critical ingredient to economic growth and job creation and we don't want to have deficit increasing tax reform. We don't want to do tax reform that raises the deficit, and so in order to do tax reform without increasing the deficit you need to use these loophole closers to finance tax reform because that's critical for job creation. That means we've got to focus on the spending side of the ledger to deal with cutting spending and getting the deficit down.
You see the ingredient we subscribe to, meaning the economic doctrine, is economic growth and spending controls. Those are the two things you want to get this fiscal situation under control because with economic growth people go from collecting unemployment to working and paying taxes, revenues go up, and you cut spending to get spending down. That's what we're trying to do.
Mika Brzezinski: I know you haven't seen a budget, so I don't want to hear there's no budget, they haven't put one on the table. Try another answer without using those words. Does it appear that from what the President is saying that he is willing to give on some major issues that are very challenging when it comes to his base and that deal with some of the things that you're talking about?
Congressman Ryan: I think you're talking about the "grand bargain" or such as it existed. And he did put some Medicare, Social Security, and Medicaid issues on the table. The numbers that we're thrown around, I'm not so sure they added quite up. I think it was more of a, two dollars for spending cuts for one dollar of tax increase, closer to one-to-one perhaps, but it never got to three-to-one as far as I understand it.
We never saw a paper from the White House on this by the way. But the point is, the kinds of things they were talking about in entitlements were not their structural reforms that actually fix these problems and make them permanently solvent and that get our debt under control. They do take money from those programs and they buy you temporary relief. They would buy you a few years. They weren't the kinds of structural reforms that actually save Medicare, make Medicaid solvent, prevent the bankruptcy of Social Security. They weren't the real structural reforms. They were kind of the nickel-and-dime stuff that saves money, but don't fix the problem.
Joe Scarborough: Paul, as you know I've been a big fan of yours, not because of what you've done when the Democrats were in power, but because of what you've done when the Republicans were in power. In fact you'll remember I wrote about you I think in about 2003 or 2004 in a book, and you've always made the tough decisions. You've always faced the reality of this crisis, which gets worse by the year.
But you do understand because of the district that you come from—a swing district that the Democrats usually win in Presidential elections—you've got a Democratic President, you've got a Democratic Senate, and if you're going to get a compromise that works. I'd love to get to a $4 trillion number—you may not be able to get rid of some of the loopholes while lowering the rates.
Is it a possibility—we're not asking you to negotiate here—is it in the realm of possibility that in exchange for Medicare, Medicaid, Social Security cuts that some of the Republican Conference in the House would say 'okay listen, we don't like it, but we're realistic. We' will get rid of the loopholes and keep the rates where they are—don't raise them, but we're not going to be able to lower them'. Is that a possible compromise?
Congressman Ryan: I don't see it happening Joe, only because the kinds of entitlement reforms that were offered were not real, fundamental entitlement reforms. Some of them were fairly structural; most of them were cutting providers and cutting benefits here and there. They weren't the kinds of structural reforms that actually fix our problem, like we proposed in our budget.
We want to permanently save Medicare and make it solvent, we want to put Medicaid on a sustainable footing so we pay off its unfunded liabilities—we have about $100 trillion of unfunded liabilities. We want to put in place a plan that pretty much takes care of that, so we can calm down the credit markets and never have a debt crisis.
The kinds of Medicare, Medicaid, and Social Security cuts and reforms that the President was being willing to offer are not the kinds of things that would have ultimately prevented a debt crisis. If we're in the area of talking about what's necessary to actually permanently fix these problems, preempt a debt crisis, and get this economy going then, yeah I want to negotiate on that. But those were not the kinds of reforms that we were being presented with.
All I saw coming from this "grand bargain," from my own personal perspective, were tax increases ultimately that would have hurt job creation and the economy, and not the kinds of structural reforms that would have fixed this problem and prevented a debt crisis. It would have bought us a couple of years, but it wouldn't have saved a generation.
John Heilemann: Congressman just to be clear, the reason you guys never saw paper on that stuff from the President was because you guys shut off conversation before there was a chance.
Congressman Ryan: I wasn't in the room. I wasn't a part of this conversation so I can't tell you.
John Heilemann: But your Conference made it clear when the President said that part of the "grand bargain" from his point of view had to be the repealing of the Bush tax cuts for upper income earners after 2012 and into 2013. That was just a no-go for you guys. That was the issue that made it impossible to have any other conversations on this.
Congressman Ryan: Yes, because here's why: I'm not sure who asked me that question, but we don't think raising tax rates in 2013 is helping the economy today. Not only is the actual rate going to 39.6 percent, when you take all the other stuff that were in Obamacare and everything else, the effective top marginal tax rate goes to 44.8 percent.
Here's the problem: 54 percent of workers in America get their jobs from these kinds of businesses that file as individuals, subchapter S corporations, partnerships. One-in-four people in America get their jobs from an S corporation. We are raising their top tax rate to 44.8 percent in 2013.
Their competitors aren't taxed like that. In Wisconsin we compete against Canadians, they're getting taxed at 16 percent. We're going to raise the taxes on our businesses, on the job creators to almost 45 percent? You throw the Wisconsin income tax rate on top of that and we're taxing them more than 50 percent.
We see it as a job killer and more importantly, yeah these taxes hit in 2013, they are going to hurt jobs today because businesses look forward—they're forward looking—and when they see this massive tax increase coming, they're not going to hire today, and so we think it's a job killer.
John Heilemann: I understand all of that Congressman, but the bottom-line is that because any kind of a substantial bargain is now off the table, the likeliest outcome we're now looking at is something like the McConnell plan, where we're going to have a debt-ceiling increase with no big changes. The changes that are being proposed, although they don't go as far as you would like to go, they're still much bigger than what we're going to get now—which is nothing—and at the end of 2012 the Bush tax cuts are going to expire anyway, and that's an argument that you guys may lose politically.
Don't you think it's kind of a mistake to not have gotten what you could get now, rather than ending up where we're going to end up where you guys could get a lot less. It just doesn't seem like politically this was a smart play from the Republican point of view.
Congressman Ryan: Well I'm not looking at what's good politics, I'm looking at what's good policy, and I really believe its bad policy to stack a bunch of tax increases. By the way, these tax increases are hurting jobs today, but this debt is hurting jobs today, and I don't think we're going to get nothing out of this debt limit agreement. We wouldn't do that.
We need to get spending cuts and I think we're going to get a down payment on spending cuts. I think we're going to get spending cuts on debt and we're going to help get the debt down. Now will our spending cuts be as high as we're asking for? Probably not, and if that's the case, then the debt limit won't be increased as much as the President wants it to be, and then we're going to have to figure out what to do on the rest of it because we will have another episode to deal with before these 18 months are out.
Mika Brzezinski: You know as this has been covered over the last couple of days, I think the optics, some would say, the Republicans look a little difficult. And that may not be the case, because you made a point about the reforms that you feel are being put on the table on the side of the President not being the right ones—not really saving, not really having the effect. If they were more appropriate, would then some sort of tax increases be on the table?
Congressman Ryan: I'm not going to get into all these hypothetical's Mika – I don't see the purpose of it. I don't think it's worthwhile to negotiate to media on such things.
Here's the problem Mika: put taxes aside, put the whole tax increase issue aside, we still have to cut a lot of spending, much more than what's being talked about right now, and the President is just unwilling to go anywhere close to the kinds of spending cuts that we're going to have to have if we want to avert a debt crisis.
Look, $4 trillion I don't believe is going to do it. I really don't think it's going to cut it. The President is proposing we spend $46 trillion over the next ten years. With the debt limit increase we're saying let's spend $43.5 trillion. That's not asking a lot over a ten-year period. It will be a small down-payment on what will be necessary to prevent a debt crisis, and the President won't even do that. What we have here is a lack of leadership from the White House on what we know is mathematically is necessary to fix this problem, and that is scary to me.
Joe Scarborough: Alright, Congressman Paul Ryan, thank you so much for being with us.
Mika Brzezinski: Nice to see you. Good luck with everything.
TEXT CREDIT: U.S. Congressman Paul Ryan Washington, DC Office. 1233 Longworth House Office Bldg Washington, DC 20515 Phone: (202) 225-3031 Fax: (202) 225-3393
VIDEO and IMAGE CREDIT: Morning Joe: MSNBC
No comments:
Post a Comment