Mitt Romney’s choice for vice-president is risky for him, but good for America

Paul Ryan

The man with the plan

Mitt Romney’s choice for vice-president is risky for him, but good for America

BY PICKING Paul Ryan, an athletic and brainy young congressman from Wisconsin, as his running-mate Mitt Romney has delighted Republicans and Democrats in equal measure. To the Republican base, Mr Ryan is the distilled essence of tea, a determined tax-cutter and state-shrinker. To the Democrats, he makes a perfect target for exactly the same reasons. But no one can accuse Mr Romney any longer of being unclear about what he will do if he makes it to the White House (see article).

There is much to like about the personable Mr Ryan. He is a brave man: he was the first politician to produce a budget with a plausible plan for closing the deficit, which he did in April last year. He constantly reminds America that deficit reduction is a necessity not a luxury; and since Barack Obama has failed to do this, his persistence is especially welcome. He has said publicly and clearly that Medicare, the government-run health-insurance scheme for the elderly, is unaffordable and will, if left unreformed, go bankrupt; and persuaded his party to accept this. He has devised a plausible alternative to the current open-ended, state-financed system: government-funded vouchers toward buying insurance. He has already shown that he can work on this issue in a pragmatic and bipartisan way, refining his proposal by melding it with the ideas of Senator Ron Wyden of Oregon, a Democrat.

Mr Ryan is right, too, to call for sweeping tax reform. America’s tax code is a convoluted mess. Its marginal rates are high: American companies pay some of the steepest in the world. At the same time, it includes so many exemptions, giveaways and rebates that those who can game the system pay effective rates that are too low, benefiting their accountants and lawyers but leaving government short of cash. Mr Ryan proposes to scrap the six different rates of income tax and replace them with just two bands. He says that his tax reforms will be revenue-neutral, because he will sweep away exemptions to offset the cost of his cuts, of around $500 billion a year.

In principle, this is laudable; but there is a worrying gap in Mr Ryan’s plan. His blueprint does not begin to spell out which exemptions will go, which will stay and which will be means-tested; and exemptions are notoriously hard to get rid of. Until he is more specific, the fear must remain that the Republicans will deliver the spoonful of sugar but not the medicine, as they did under George W. Bush. If that happened, the deficit would balloon, just as it did under Mr Bush. And, with the top rate of income tax falling from 35% to 25%, the rich would benefit while spending cuts hit the poor disproportionately.

Let’s be clear

Mr Ryan was also wrong to vote against the proposals of the Bowles-Simpson deficit commission, which he did on the grounds that it wanted to close the deficit partly through an increase in tax revenues. He believes that the gap should be closed wholly through spending cuts. Because Mr Ryan, in true Republican fashion, wants to increase spending on defence, everything else—poverty relief, transport infrastructure, environmental protection and education, for instance—will have to be squeezed intolerably.

Explore our interactive guide to the 2012
presidential election

Mr Ryan’s frankness about America’s fiscal position may put off many voters—especially those who expect to depend on Medicare in the near future. He may, therefore, harm Mr Romney’s chances of election. But although his thinking is open to much criticism, his clarity is a virtue, and increases the chances that voters will be presented with a proper choice on the central issue of this November’s presidential election: how big America’s government should be.

Brophy Monday 20 August 2012 - 8:07 pm | | Brophy Blog
Used tags: , , , , ,

No comments

(optional field)
(optional field)
Remember personal info?
Small print: All html tags except <b> and <i> will be removed from your comment. You can make links by just typing the url or mail-address.