Paul Ryan: Heres How We Can End This Stalemate Both Reagan and Clinton negotiated debt-ceiling deals with their opponents. Were ready to negotiate. By PAUL RYAN The president is giving Congress the silent treatment. Hes refusing to talk, even though the federal government is about to hit the debt ceiling. Thats a shame—because this doesnt have to be another crisis. It could be a breakthrough. We have an opportunity here to pay down the national debt and jump-start the economy, if we start talking, and talking specifics, now. To break the deadlock, both sides should agree to common-sense reforms of the countrys entitlement programs and tax code. First, lets clear something up. The president says he will not negotiate on the debt ceiling. He claims that such negotiations would be unprecedented. But many presidents have negotiated on the debt ceiling—including him. In 1985, Ronald Reagan signed a debt-ceiling deal with congressional Democrats that set deficit caps. In 1997, Bill Clinton hammered out an agreement with congressional Republicans to raise the debt ceiling, reform Medicare and cut capital-gains taxes. Two years ago, Mr. Obama signed the Budget Control Act, which swapped spending cuts for a debt-ceiling hike. So the president has negotiated before, and he can do so now. In 2011, Oregons Democratic Sen. Ron Wyden and I offered ideas to reform Medicare. We had different perspectives, but we also had mutual trust. Neither of us had to betray his principles; all we had to do was put prudence ahead of pride. If Mr. Obama decides to talk, hell find that we actually agree on some things. For example, most of us agree that gradual, structural reforms are better than sudden, arbitrary cuts. For my Democratic colleagues, the discretionary spending levels in the Budget Control Act are a major concern. And the truth is, theres a better way to cut spending. We could provide relief from the discretionary spending levels in the Budget Control Act in exchange for structural reforms to entitlement programs. These reforms are vital. Over the next 10 years, the Congressional Budget Office predicts discretionary spending—that is, everything except entitlement programs and debt payments—will grow by $202 billion, or roughly 17%. Meanwhile, mandatory spending—which mostly consists of funding for Medicare, Medicaid and Social Security—will grow by $1.6 trillion, or roughly 79%. The 2011 Budget Control Act largely ignored entitlement spending. But that is the nations biggest challenge. The two political parties have worked together on entitlements before. In 1982, Social Securitys trustees warned Congress that the program would go bankrupt within a year. If it had, seniors would have seen an immediate cut in their benefits. Instead, Congress passed a package of reforms—the most important of which was an increase in the retirement age. Because Congress phased in this reform over time, there were no budget savings in the first five years. But through 2012, the savings were $100 billion. In the next 75 years, Social Securitys actuaries expect that these reforms will save $4.6 trillion. Just as a good investment gets higher returns through compound interest, structural reforms produce greater savings over time. Most important, they make the programs more secure. They protect them for current seniors and preserve them for the next generation. Thats what the president and Congress should talk about. Here are just a few ideas to get the conversation started. We could ask the better off to pay higher premiums for Medicare. We could reform Medigap plans to encourage efficiency and reduce costs. And we could ask federal employees to contribute more to their own retirement. The president has embraced these ideas in budget proposals he has submitted to Congress. And in earlier talks with congressional Republicans, he has discussed combining Medicares Part A and Part B, so the program will be less confusing for seniors. These ideas have the support of nonpartisan groups like the Bipartisan Policy Center and the Committee for a Responsible Federal Budget, and they would strengthen these critical programs. And all of them would help pay down the debt. We should also enact pro-growth reforms that put people back to work—like opening up Americas vast energy reserves to development. There is even some agreement on taxes across the aisle. Rep. Dave Camp (R., Mich.) and Sen. Max Baucus (D., Mont.) have been working for more than a year now on a bipartisan plan to reform the tax code. They agree on the fundamental principles: Broaden the base, lower the rates and simplify the code. The president himself has argued for just such an approach to corporate taxes. So we should discuss how Congress can take up the Camp–Baucus plan when its ready. Reforms to entitlement programs and the tax code will spur economic growth—another goal that both parties share. The CBO says stable or declining levels of federal debt would help the economy. In addition, federal interest payments would be smaller, policy makers would have greater leeway to respond to any economic downturns and the risk of a sudden fiscal crisis would be much smaller. This isnt a grand bargain. For that, we need a complete rethinking of governments approach to helping the most vulnerable, and a complete rethinking of governments approach to health care. But right now, we need to find common ground. We need to open the federal government. We need to pay our bills today—and make sure we can pay our bills tomorrow. So lets negotiate an agreement to make modest reforms to entitlement programs and the tax code. This is our moment to get a down payment on the debt and boost the economy. But we have to act now. The Federal Reserve wont keep interest rates low forever. The demographic crunch will only get worse. So once interest rates rise, borrowing costs will spike. If we miss this moment, the debt will spiral out of control. Thats why I want a budget agreement—because if we dont make the tough decisions now, well face only tougher decisions later. We can work together. We can do some good. All it takes is leadership—and for the president to come to the table. Mr. Ryan, a Republican
Posted on: Tue, 15 Oct 2013 22:47:24 +0000
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