For the last several days, the Beltway media have been gripped by the impasse between the GOP’s presumptive 2016 presidential nominee and the Republican speaker of the House. “Paul Ryan,” Politico announced, “is stuck in a Trump trap.” Endorsing the uncouth vulgarian overwhelmingly supported by GOP primary voters, Tiger Beat on the Potomac argued, “is a major risk to Ryan’s brand.” Josh Barro agreed, declaring “Ryan's real priority is policy, not power.” He’s just “not ready” to give his backing to Donald Trump “because he's genuinely despondent and sees no good options available to himself.” Writing in the Washington Post, Ruth Marcus went so far as to pen a speech a pained Speaker Ryan could deliver to explain “my reservations about what a Trump nomination would mean for our party--and, more important, what a Trump presidency would mean for our nation.”
Yet for all of this manufactured drama, there has been little discussion about the real difference between Donald Trump and Paul Ryan. To be sure, the purportedly “serious” and “thoughtful” idea man Paul Ryan would not use expletives in campaign rallies or boast about the size of his phallus. And while Ryan at least sticks to his core convictions, Trump’s gymnastic flip-flops show he has none at all.
But one of these two Republicans is a charlatan, a polished con man of the people who uses elegant spreadsheets, impressive policy jargon, and soaring rhetorical flourishes to create an elaborate façade for massive tax cuts for the rich, oceans of red ink for the U.S. Treasury, and devastating spending cuts to programs designed to help the most vulnerable Americans. The other man is Donald Trump. To put it another way, Paul Ryan is a dumb person’s idea of a smart person; Donald Trump is a smart person’s idea of a dumb person.
Consider, for starters, their respective tax plans.
According to various analysts, Trump’s plan unveiled last September would cost the United States Treasury as much as $12 trillion over the next decade. (As for who will pocket those proceeds, more on that later.) To put that gargantuan sum in perspective, the non-partisan Congressional Budget Office (CBO) forecast total federal spending at $51 trillion and tax revenue at $42 trillion over the next 10 years. By draining Uncle Sam’s coffers by $12 trillion to $30 trillion, President Trump would bequeath over $21 trillion in additional red ink to his successor. That’s on top of the $19 trillion in national debt the United States has run up in its entire history. It’s no wonder the Donald keeps flip-flopping over his tax plan, even bringing in veteran supply-siders Stephen Moore and Larry Kudlow to give his proposal a makeover from the dangerously ignorant to just comically outrageous.
Making matters worse, on March 31 Trump promised he could completely eliminate the national debt “over a period of eight years.” But as the numbers above show, to do that President Trump would have to slash federal spending by 80 percent, a figure so preposterously high that it would create an economic calamity on the scale of the Great Depression. (That’s even leaving aside that most of the budget consists of mandatory spending on Medicare, Medicaid, Social Security, and the debt interest legislated by Congress.)
To get around this unpleasant math, Trump unveiled two magic ponies. Pony No. 1 is the myth of unprecedented economic growth made possible by his tax cuts and crackdown on Chinese trade. But as Glenn Kessler documented in his Four Pinocchio review of Trump’s claim, the math is simply impossible:
Trump is insulting the intelligence of Americans for making such a claim in the first place.
So after backtracking from his preposterous promise to erase the national debt in eight years, Donald Trump discovered his second magic pony. President Trump would essentially default on the national debt. As documented last week:
In his on-going war on common sense and basic math, the would-be businessman-president vowed he would reduce America’s $19 trillion national debt by paying U.S. creditors less than full value on the Treasury bonds they hold. “Experts see it as a reckless idea,” the Washington Post helpfully explained, “that would send interest rates soaring, derail economic growth and undermine confidence in the world’s most trusted financial asset.”
If this all sounds familiar, it should. That’s because long before Donald Trump, Paul Ryan was offering his own comical scheme to slash tax revenue, reward the rich, and magically balance the budget. As Matt O’Brien aptly summed it up in early April, “Donald Trump is just Paul Ryan on steroids.”
In short: Ryan's plan uses a magic asterisk to try to cover up how politically impossible it is, while Trump's plan is a magic asterisk that doesn't come close to covering up how economically impossible it is.
But here's the irony. Ryan's unspecified savings and implausible assumptions have somehow turned him into the GOP's intellectual authority at the same time that Trump's have turned him into a laughingstock.
Yes, Paul Ryan’s annual budget blueprints would be hilarious if so many people didn’t take them so seriously. Like Trump, Ryan depends on his own magic asterisks in the form of mystery loopholes and “dynamic scoring” to turn bullshit into gold.
Beginning with his "Roadmap for America's Future" in 2010, Paul Ryan has rolled out yet another version of his "Path to Prosperity" budget. Every spring, 95 percent of congressional Republicans would vote for it. And despite minor tweaks along the way, Ryan's annual House GOP budgets always had the same general contours. As summed up last fall:
For starters, Ryan would provide tax cuts to the wealthy that would make George W. Bush look like Karl Marx. While the corporate tax rate would be lowered from 35 to 25 percent, the capital gains and estate taxes would be eliminated altogether. The current code's seven tax brackets would be condensed to just two: 10 and 25 percent. The trillions of dollars lost to the United States Treasury would only be partially offset by $4 trillion in spending cuts, two-thirds of them to programs for low-income Americans. Obamacare spending would be repealed, though its $700-plus billion in Medicare savings over 10 years would be pocketed by Uncle Sam to help pay for Ryan's tax cuts. Combined with the cuts to Medicaid spending and a conversion into block grants for the states, Ryan's supposedly prosperous path would mean between 38 and 44 million people would lose their insurance. All told, non-defense discretionary spending as a percentage of the American economy would drop to its lowest level since 1950. Meanwhile, Medicare health coverage provided by the government would be replaced by an underfunded voucher scheme that would inevitably ration care by significantly shifting costs onto future seniors. And as we'll see below, Paul Ryan's budget blueprints would add between five and six trillion dollars in new debt over and above what the Congressional Budget Office (CBO) projected for the federal government in the ensuing decade.
But in his six-year journey from congressman to House Budget Committee chairman to House Ways and Means Committee chairman to speaker of the House, Paul Ryan has never answered the question of how he’d close that $6 trillion hole.
The reason why is simple. Every year, Paul Ryan promised to "lower rates" and "broaden the base." But "broadening the base" means closing or curtailing at least some of the tax breaks, loopholes, and credits that cost Uncle Sam about $1.4 trillion in revenue every year. But like his 2012 running mate Mitt Romney, Paul Ryan hasn't once in six years had the courage to identify a single tax expenditure he'd end.
During the 2012 campaign, Rep. Ryan described himself and Governor Romney as "courageous." Faced with oceans of red ink as large as $6 trillion in the various incarnations of his budget, Paul Ryan offered a magic formula for plugging the mammoth hole. He explained it on MSNBC's Morning Joe in March 2012:
Get rid of the special interest loopholes, special deductions, lower everybody's tax rates, bring in at least as much revenue to the government but grow the economy and create jobs, and get spending under control so we can pay off this debt.
But that answer only raises another question: Which of these "special interest loopholes" and "special deductions" would the Republicans' favorite wonk get rid of? Will Ryan call for limiting or ending the $99 billion-per-year home mortgage interest deduction? The $58 billion Earned Income Tax Credit Ronald Reagan called "the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress?" The $52 billion lost annually to the deduction for charitable giving? More than three years later, it's a question Paul Ryan still refuses to answer.
Six years later, Ryan is still silent which tax breaks he would end.
Not that he hasn't had plenty of opportunities to do so. As Paul Krugman explained in "Pink Slime Economics" in April 2012:
We're talking about a lot of loophole-closing. As Howard Gleckman of the nonpartisan Tax Policy Center points out, to make his numbers work Mr. Ryan would, by 2022, have to close enough loopholes to yield an extra $700 billion in revenue every year. That's a lot of money, even in an economy as big as ours. So which specific loopholes has Mr. Ryan, who issued a 98-page manifesto on behalf of his budget, said he would close?
None. Not one. He has, however, categorically ruled out any move to close the major loophole that benefits the rich, namely the ultra-low tax rates on income from capital. (That's the loophole that lets Mitt Romney pay only 14 percent of his income in taxes, a lower tax rate than that faced by many middle-class families.)
As Matthew Yglesias pointed out that same spring, in Ryan's 13-page description of his tax reform vision, those politically tough choices were completely missing:
Thirteen pages dedicated to explaining his vision for revenue-neutral tax reform. And even so he manages to not name a single tax deduction that he's planning to eliminate. Home mortgage interest deduction? I dunno. Electric vehicle tax credit? I dunno. Deductibility of state and local income taxes? I dunno.
Ryan has admitted as much. When Joe Scarborough asked "Which one of those [loopholes] do you eliminate," Ryan decided discretion was the better path:
"We want to do this in the light of day and in front of everybody. So the Ways and Means Committee, which is in charge of the tax system, sent us the plan here, which is a 10 and 25 percent bracket for individuals and small businesses, and then they want to have hearings and, in light of day, show how they would go about doing this."
Appearing on CBS Face the Nation just days later, Ryan again claimed that "We're proposing to keep revenues where they are, but to clear up all the special interest loopholes, which are uniquely enjoyed by higher income earners, in exchange for lower rates for everyone." But he once again pleaded the Fifth when asked which "special interest loopholes" he would do away with:
"That's what the Ways and Means Committee is supposed to do. That's not the job of the Budget Committee," Ryan said on Fox News Sunday. "What we're saying is, we want to do this in the light of day, not in some backroom deal. We want to have hearings in the Ways and Means Committee that Chairman Dave Camp has already started that work, to say what tax benefits should go."
But much to the dismay of then-Senate Minority Leader Mitch McConnell, House Speaker John Boehner, and House Budget Committee Chairman Paul Ryan, Dave Camp (R-MI) finished his work in early 2014. When the going got tough, the outgoing Ways and Means Committee chief made the tough calls on loopholes he'd limit, deductions he would cap, and tax breaks he would end. But when Camp delivered it in February 2014, it was dead on arrival. And it was the Republicans who killed it. Holding the smoking gun was Camp's successor at Ways and Means, one Paul Ryan.
He's a leading voice for Republicans on fiscal policy but Rep. Paul Ryan is noticeably restrained when it comes to his party's new blockbuster tax plan.
While applauding Ways and Means Committee Chairman Dave Camp's "courage" for releasing a comprehensive tax overhaul on Wednesday, Ryan (R-Wis.) ducked questions on the proposal's substance. He simply said he's excited to start a conversation about rewriting the tax code.
"This is the beginning of a good debate," Ryan said in an interview.
The beginning and, as it turned out, the end. Because by then, Paul Ryan had moved on to a new scheme for slashing government and taxes, "dynamic scoring."
That's right. Having guaranteed red ink as far as the eye could see by promising to close trillions in loopholes and then chickening out when it came time to say which ones, the "zombie-eyed granny starver" came up with a new magic trick:
If the Math Still Doesn't Work, Change the Way Math Works. When it comes to the ending $500 or $600 billion in tax breaks every year, the politics of producing a "revenue-neutral" budget are brutal and the math is even worse. So, Paul Ryan is demanding the Congressional Budget Office (CBO) use so-called "dynamic scoring" to magically generate new revenue from the extra economic activity his rate cuts theoretically produce.
During the 2012 campaign, former Reagan Treasury official Bruce Bartlett revealed exactly what Ryan and his GOP colleagues had in mind by forcing the CBO to use dynamic scoring:
My concern is that the Republican effort is just a smokescreen to incorporate phony-baloney factors into revenue estimates to justify unlimited tax cutting … In other words, it is an issue of credibility. Republicans don't really care about accurate revenue estimates; they just want them to show that tax cuts pay for themselves, so they can pass more of them without constraint.
That is precisely what has come to pass now that Republicans control both houses of Congress. Not only is the CBO under new GOP-selected director Keith Hall adding dynamic scoring to its assessments of legislation, virtually all of the 2016 Republican candidates are doing so as well. Thanks to comically optimistic "dynamic scoring" forecasts, the likes of Marco Rubio, Jeb Bush, and Donald Trump (among others) have magically erased trillions in budget deficits their massive tax cut plan would inescapably produce. And how does Paul Ryan describe what could rightly be brushed off as Unicornomics?
"He also noted that he prefers the term 'reality-based scoring' over 'dynamic scoring.'"
Speaking of reality, Paul Ryan has been known to occasionally acknowledge it when it comes to the national debt. In 2011, he echoed the words of new Speaker John Boehner and insisted, "You can't not raise the debt ceiling." He should know: Along with Boehner and Mitch McConnell, Ryan voted for all seven of President George W. Bush's debt limit hikes, including a "clean" bill raising the ceiling $800 billion in 2004. And with Uncle Sam's annual deficits plummeting under President Obama, Rep. Ryan (like Boehner) in March 2013 acknowledged, "We do not have a debt crisis right now." (Ironically, the Obama administration has already hit the deficit targets set by the Simpson-Bowles Commission of which Paul Ryan was a member. Of course, Ryan voted against its recommendations because they included raising taxes.)
Nevertheless, by December 2013, Ryan was once again joining tea party hardliners in threatening to hold the debt ceiling hostage:
"We as a caucus -- along with our Senate counterparts -- are going to meet and discuss what it is we're going to want out of the debt limit. We don't want nothing out of this debt limit."
When Congress voted in February to unconditionally suspend the debt ceiling for a year, Ryan voted no because "it was a 'missed opportunity' for policy makers to address the growing debt." And now, with the annual budget deficit down by two-thirds since President Obama first took the oath of office, the Man Who Could Be Speaker is once again toying with a sovereign default by the United States. Apparently, he no longer believes that is "the unworkable alternative." With the support of the "Default Protection Act" which recently passed his House Ways and Means Committee, Ryan wants to simply redefine the meaning of "default:"
The measure, dubbed the "Default Prevention Act," says that if the U.S. hits its debt ceiling of $18.1 trillion later this year, the Treasury Department shall issue new obligations "solely for the purpose of paying" principal and interest on existing debts, and for financing Social Security payments.
In a nutshell, the "super, super smart" Paul Ryan is trying to miraculously shift the blame away from his fellow Republican extortionists for what Speaker Boehner warned would be "financial disaster, not only for our country but for the worldwide economy."
As it turned out, Paul Ryan wasn’t the only Republican leader who called for taking the debt ceiling hostage. During the GOP’s extortion over Uncle Sam’s borrowing authority in the summer of 2011, Donald Trump declared that “unless the Republicans get 100% of what they want,” they should trigger a default in order to prevent Barack Obama’s reelection:
“When it comes time to default, they’re not going to remember any of the Republicans’ names. They are going to remember in history books one name, and that’s Obama. They’re not going to be talking about Boehner or anybody else.”
Four years later, Trump told GOP voters “I would use the debt limit” because it’s "worth the fight" for Republicans to pressure the Obama administration to agree to spending cuts. But whoever the next president is, he or she will have to raise the debt ceiling repeatedly, especially if either Donald Trump or Paul Ryan gets his way and delivers a staggering tax cut payday for America’s plutocrats. As Jared Bernstein recently observed of Ryan’s House GOP proposal:
The top 0.1 percent gets a tax cut of over $1 million, while middle income families end up with a couple of thousand dollars (you don’t see it due to scaling; the bottom fifth gets a cut of about $560). Some complain that it’s not fair to look at it this way; you should look at the tax cuts as a share of household income. Okay: that’s a 14 percent cut relative to pretax income for the richest group and a 4 percent cut for the middle class; 2 percent for the poorest fifth. The top fifth gets a cut that’s twice that of the middle fifth, as a share of their income.
In other words, this is a highly regressive tax plan. I was about to say that distributional results of the tax plans of today’s Republican candidates are even more skewed, but I was somewhat surprised to find that the Trump results look quite similar to those from the Ryan budget (see Table 5 here).
It’s no wonder Speaker Ryan lamented to CNBC’s John Harwood, “I do not like the idea of buying into these distributional tables.”
Of course, that’s not all Paul Ryan doesn’t like. He doesn’t like that Donald Trump wants to leave Medicare and Social Security spending untouched, while the speaker wants to privatize and cut both. As ridiculous as Donald Trump’s health care plan may be, at least he has one. In contrast, Paul Ryan has been promising “patient-centered” health care reform since 2010. As disgusted as Ryan claims to be about Trump’s proposed Muslim ban and call to round up and deport 12 million undocumented immigrants now in the United States, his inaction on comprehensive immigration reform and his demand to freeze the resettlement of Syrian refugees doesn’t exactly offer the best contrast. (It’s awfully hard to take Ryan seriously when he proclaims “this party does not prey on people's prejudices” even as he never shied away from the dog whistle when lecturing about "makers and takers" turning "the safety net into a hammock" in "our inner cities.") And while Ryan’s discomfort with Trump’s sexist comments is sincere, the speaker’s own past dismissal of a “health of the mother” exception to abortion legislation as “a loophole wide enough to drive a Mack truck through” doesn’t make him a paragon of women’s rights, either.
But on the things that matter most to Paul Ryan—massive tax cuts for the rich, trillions in new debt, ridiculous gimmicks to whitewash endless deficits—Donald Trump is his orange soul mate. They’re both snake oil salesmen, even if Ryan won’t admit it. The speaker may say he’s “not ready” to endorse him, but Trump should have had him at “hello.”
