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Go Home Who Wants To Be Paul Ryan's Press Secretary?

JONATHAN CHAIT JANUARY 28, 2011

Who Wants To Be Paul Ryan's Press Secretary?

BY JONATHAN CHAIT

News stories about Paul Ryan have increasingly come to resemble an open competition for the job of Paul Ryan's press secretary. The latest audition, from ABC News, actually compares him to Kevin Kline's character in "Dave," an earnest wonk combing through the federal budget for examples of waste. I am not joking:

Hilariously, the result of Ryan's Dave-like search through the budget -- and the only example of a putative budget savings mentioned anywhere in the piece -- is his claim to have discovered a savings in the student loan program. In fact, this example is exactly the opposite of what Ryan (and the story) proclaim.

The old federal student loan program guaranteed loans made from private banks to students. This gave the banks incentive to shovel money out the door, knowing Uncle Sam would back them up in case of failure, which of course happened constantly. President Clinton cut, and then President Obama eliminated,the subsidy to the banks, saving taxpayers tens of billions of dollars. Here is the Congressional Budget Office's description:

“Despite the many similarities between the FDLP [Federal Direct Loan Program] and the FFEL [Federal Family Education Loan, aka guaranteed lending] program, the latter is significantly more costly for the federal budget. For example, CBO recently estimated that the President’s proposal to eliminate the FFEL program and replace it with additional direct lending would save the government a total of $62 billion between 2010 and 2020. Although the federal cost per dollar of student loans originated varies from year to year and among different types of loans, a loan made in the FFEL program consistently shows a much higher budgetary cost than if it had been made in the direct loan program…

The higher costs in the guaranteed loan program (on both a FCRA and a fair-value basis) result mainly from the way in which the government compensates FFEL lenders. Payments to those lenders are fixed in legislation rather than set through a mechanism—such as a competitive bidding process—that ties reimbursement to actual costs incurred. In general, those statutory payments appear to exceed lenders’ basic administrative costs and their funding costs under normal market conditions (although during the financial crisis, the payments proved too low to cover the surge in lenders’ borrowing costs). Because FFEL lenders must compete to attract borrowers, any difference between the statutory payments they receive and their basic costs is mostly absorbed by increasing marketing efforts, enhancing the administrative services they provide, or offering other benefits to schools and students. Thus, competition between lenders benefits schools and borrowers rather than lowering costs to the government. In addition, FFEL lenders fund their loans in the capital markets, which introduces additional costs and risks to the program that do not arise when loans are funded through the Treasury.”

Ryan is a fervent ally of the college lending industry. In 2007, he was one of only 71 Republicans to vote against the College Student Relief Act, which would have cut the interest rate on many student loans, including the FFEL program, in half. Inside Higher Ed notedthat the bill would cut “deeply and directly into lenders' profits.” The bill passed the House 356-71, but stalled in the Senate.

So, that's the one idea this fresh-faced reformer comes up with the balance the budget: shovel billions of dollars in extra subsidies to an inefficient and wildly corrupt industry whose water he has faithfully carried. And this isn't an exception --Ryan's record is one of wild fiscal profligacy. I realize he's cute and energetic and exudes an aw-shucks Midwestern earnestness, but the reality bears absolutely no relation to the image.

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18 comments

Paul Ryan may be cute but he isn't cool like Nick "Leather" Gillespie and as you point out, his putative deficit hawkishness does not at all square with his record on federal spending. So can we all stop taking Ryan seriously?

- liberalref

January 28, 2011 at 2:43pm

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The ABC News story about Ryan should be Exhibit A in why ratings for network broadcast news have been sliding and should keep sliding into oblivion.

- wildboy

January 28, 2011 at 2:44pm

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Paul Ryan looks a lot like Gabe on The Office.

- subterran

January 28, 2011 at 2:53pm

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Sarah Palin would look GREAT as Ryan's press secretary. And she wouldn't have any problem explaining pesky inconsistencies like this, they'd be papered over with her OWN pesky inconsistencies.

- AllanL5

January 28, 2011 at 2:55pm

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"Paul Ryan looks a lot like Gabe on The Office." Ouch. Tis true but still, ouch.

- tnmats

January 28, 2011 at 3:05pm

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- Ryan and the GOP would rather defend his plan in the media rather than inside their own committees and leadership. His pamphlet is not a bill and any bill which is close to his ideas will be radioactive. If they give up now it will be convenient to place the blame on anyone-everyone but him and them. I prefer we dial it down so they have a chance for his shit to hit the fan. Clear the way way and give him a wide berth, it could be the best show this year.

- michaelg

January 28, 2011 at 3:40pm

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Oh For Crying Out Loud!!! This is disgusting. This man is the biggest political fraud of this generation. No talk about how his plan doesn't add up once you look at the massive tax cuts for the rich in it. No talk about how he relies on arbitrary caps. No talk about his bullflop about Obamacare (i.e. 10/6) This could have been produced by the GOP itself.

- MikeB.

January 28, 2011 at 3:59pm

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One has to wonder...does Ryan really love Ayn Rand's work? Or is even that a calculated narrative? Or perhaps more frighteningly he does love AR, but he has a nasty bit of cognitive dissonance blinding him to how he doesn't do a very good job of following her.

- Jonas

January 28, 2011 at 5:04pm

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great post

- pdx1

January 28, 2011 at 5:23pm

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Great post and thank you MikeB.

- Sophia

January 28, 2011 at 5:58pm

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All I want is some integrity. If the Republicans want to say, "We won't raise tax rates, ever!" and explain how they intend to balance the budget so the rest of us can decide if we like or reject what they are planning to do, that's fine. But don't say, "We won't raise taxes and we need to have an adult conversation about the deficit," because when they say that, they have already decided to be childlike in insisting on having their way.

- Nusholtz

January 28, 2011 at 6:01pm

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Thanks for this post. Since I don't watch much tv, I didn't realize tv news had devolved this much. Journalists everywhere should be shaking their heads in shame at this display of policy ignorance and fawning celebrity-building. Truly stomach-turning.

- stevedwight

January 28, 2011 at 10:05pm

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I watched this a second time and the poor quality of the reporting is astounding. A brief search on the internet would have showed that Ryan's votes have been budget busters. No mention of that. No question about the taxes when Ryan talked about trillions in debt. The idea that he goes through the budget line by line is nonsense. Just last month fraud boy was asked for specific programs he would elminate, and replied that he just set the caps that was up the appropriaters. Ryan is a boob, but he has found something profound out. If he proclaims his deep thinking, reporters will be too lazy to check and he will have the reputation.

- MikeB.

January 29, 2011 at 7:55am

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I disagree, Jonas. Ryan does a great job of following her example. She was a confidence woman of the first order and had a different set of rules for herself than for everyone else. I think he's doing pretty good.

- miceelf

January 29, 2011 at 6:25pm

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So, does this signal the end of the Lame-Stream-Media, as they finally turn to the dark side? Or are they just being the bunch of hungry-for-ratings-do-anything-say-worse idiots we thought they were?

- GSpinks

January 29, 2011 at 6:31pm

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miceelf - If you put it that way, sure. It's just that when Ryan says that he has been greatly influenced by AR it is presumably because of the small government message. It's not clear to me that Ryan gives a crap about the role of government or if he just uses that rhetoric to gain greater political power.

- Jonas

January 29, 2011 at 8:45pm

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"Ouch. Tis true but still, ouch." I think Zach Woods should be more insulted by the comparison, and he hasn't done anything to deserve it.

- arock28

January 30, 2011 at 6:38am

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I was thinking of who exactly Ryan reminded me of while he stared with a smirking and creepy look of kill-joy on his face. And it finally hit me....Scott Baio in his seminal TV role as 'Charles in Charge' http://www.totallythebomb.com/wp-content/uploads/2009/10/scottbaio2.jpg

- singlspeed

January 31, 2011 at 10:03am

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