JONATHAN CHAIT MAY 16, 2011
The most interesting thing to come out of Paul Ryan's budget-reboot speech today is that he's toning down the debt-hysteria angle and returning to his supply-side roots. The speech is full of lamentations about class warfare, optimistic talk about the future, and even a shout-out to original supply-sider Jack Kemp, "my mentor." And if you're looking for news value, I think this passage of the speech shows how hard it's going to be to get Ryan to support any Bowles-Simpsonesque grand bargain:
See, right now, we’re finally having a debate in Washington about how to address our fiscal problems. But we’re still not having the debate we need to have.
To an alarming degree, the budget debate has degenerated into a game of green-eyeshade arithmetic, with many in Washington – including the President – demanding that we trade ephemeral spending restraints for large, permanent tax increases.
This sets up a debate in which we are really just arguing over who to hurt and how best to manage the decline of our nation. It is a framework that accepts ever-higher taxes and bureaucratically rationed health care as givens.
I call it the “shared scarcity” mentality. The missing ingredient is economic growth.
"Green-eyeshade arithmetic" is a classic supply-sider catchphrase. It's meant to disparage traditional fiscal conservatives concerned primarily with paying down the debt. Reducing the deficit is nice, but growth is what really matters, and that relies upon low upper-bracket tax rates. Ryan likewise adopts the Norquistian claim that bipartisan budget deals are bad because the tax hikes happen but the spending cuts don't. (The belief is demonstrably false, but never mind.) He's putatively arguing against Obama, but the real target seems to be a bipartisan deal that many GOP Senators seem to want to cut.
I've seen plenty of evidence that Republicans Senators support a deal like this, but no evidence that House Republicans do. Ryan's opposition is all the more reason to doubt that it can.