Ryan: ‘We Need to be Honest’ About Entitlements

by Andrew Stiles

House Budget Committee Chairman Paul Ryan (R., Wis.) on CNBC’s Squawk Box yesterday, on why and, to some degree, how Republicans plan to tackle entitlement reforms, despite the overwhelming political challenges:


Ryan: We’ve got a fiscal problem at all levels of government in this country. The sooner we deal with our fiscal problems on spending, the better off everybody is going to be. The less draconian kinds reforms will be needed down the road — that’s why we need to get at the root cause of our spending problems at the federal, state and local governments. We need to be honest with people. We have to stop rewarding politicians for making empty promises to voters. We have to start rewarding politicians for being honest with people and having fact-based budgeting around here.

Q: If you look at the Medicaid/Medicare numbers they are terrifying as you go down the next 20 years. How are you going to educate, without the political cost, the American people to recognize and be willing to accept there are older Americans and big voters who aren’t too thrilled with the idea of their benefits being cut, younger Americans who don’t want to lose their future benefits, you have a whole host of constituents around the country who probably need to be educated in a way that allows you to do what politically, needs to be done.

Ryan: So, we realize we are probably going to walk into some political issues. But that should not stop us from doing what we think is the right thing. I’d say two points. Number one, seniors will get benefit cuts if we don’t fix these programs, if we don’t put them on sound financial footing. If we do nothing that means cuts will happen to current retirees. More to the point, future generations will not have these programs for them like they are designed today because they are going bankrupt. So the smart, right, moral thing to do is protect these programs for those in and near retirement — if we act now we can do that. And then reform them for future generations so they actually have programs they can count on when they retire.

We want to get ahead of this problem. We want to preempt the debt crisis. We don’t want to delay and have European austerity where you are cutting current seniors, where you are raising taxes on job creators. We want to get ahead this debt crisis, reform these entitlement programs and doing it now means we can do it in a very phased and gradual way. We can protect people in and near retirement from any changes. And have smart reforms going forward so younger generations actually have a health and retirement systems they can count on, that are going to be safe and solvent when they retire.

That is the smart thing to do. Yes we will be demagogued for proposing that, yes we will be walking into a political buzz saw. But I for one believe the people are way ahead of the political class. I believe Americans understand the debt is getting out of control, this deficit is out of control and they want political leaders to be candid with them, to be honest with them, and to solve these problems.

Ryan is currently drafting a Republican budget for 2012. In a recent op-ed in the Milwaukee Journal-Sentinel, he laid out “four key principles that will guide our work,” as follows:

– Make no changes to those in or near retirement. Government needs to reorient its policies without forcing citizens to reorganize their lives. Reforms must be gradual, with no disruptions for those in or near retirement.

– Improve our health and retirement safety net. We must make our health and retirement security programs not just sustainable but better – ensuring real security, less waste and greater access to quality, affordable health care.

– Lift the crushing burden of debt. The shadow of our spiraling debt is discouraging job creators today. We should change our fiscal trajectory and save our country from bankruptcy.

– Spur economic growth and prosperity. Economic growth, not deficit spending, is the key to higher wages, more jobs and rising standards of living. We should build our budget on strong foundations: low taxes, sound money, reasonable regulations and spending restraint.

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