On Tuesday, House Budget Committee Chairman Paul Ryan delivered the Keynote Address at the "Tax Policies For 4% Growth" conference held at the George W. Bush Presidential Center. During his remarks, he bluntly explained that the United States, not unexpectedly, is about to experience a painful – and predictable – European-style debt crisis. For years, politicians in Washington have failed to rein in federal spending or reform entitlements. As a result, he argues, the American people must now choose between two very different visions for the country. And the stakes couldn't be higher.
In truth, as the Congressman explains, 70 percent of Americans today receive more benefits from the government than what they put in through paying taxes. Even worse, poverty rates are the highest in a generation and women's unemployment is unprecedented. And still, the Democrat controlled Senate has failed to introduce -- let alone pass -- a budget for three straight years. And while the president did propose a budget last February -- thereby fulfilling one of his many Constitutional obligations -- his fiscal blueprint was voted down unanimously presumably because it failed to address the major drivers of our debt. (Oh, and it never balanced). And so, the task of putting America back on a more sustainable trajectory seems to have fallen on the shoulders of Congressman Paul Ryan and his Republican colleagues.
More importantly, perhaps, the Wisconsin Congressman took some time during his address to defend his Fiscal Year 2013 budget. As far as I can tell, he outlined two significant differences between the President’s plan and his own. (1) The Ryan proposal boldly shrinks the number of federal income tax brackets from six to two (25 percent and 10 percent, respectively), thus simplifying the tax code and allowing consumers to keep more of their hard earned money. By contrast, President Obama’s plan raises the top individual tax rate to 44.8 percent. As Ryan points out, since 8 out of 10 businesses file their taxes as individuals, these rates would negatively affect small business owners and entrepreneurs. (2) The Ryan plan abolishes corporate welfare and crony capitalism. In short, by eliminating the government practice of picking winners and losers in the marketplace – as we’ve seen happen before – all businesses would be subjected to the same rules and regulations. On the other hand, the President’s plan still provides billions of dollars in subsidies to “green energy” companies like Solyndra.
In the end, despite the state of the union – and the fiscal challenges we face – I was struck most of all by Congressman Ryan’s sense of optimism. “The country is not based on geography, but based on an idea,” he intoned during his remarks. The vast majority of Americans, indeed, still believe in the American dream. The challenge for Republicans, however, is creating a society that provides equality of opportunity – not equality of outcome – for every citizen. The Republican Party, he urges, must strive to promote upward mobility and economic independence, the two surest ways to avert the impending debt crisis and pay off our national debt.