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Ryan: What’s Driving our Debt



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Here is House Budget Committee Chairman Paul Ryan (R., Wis.) explaining the nature of the debt crisis in the United States, on Fox News with Mike Huckabee:

Huckabee: “What does this debt mean to America’s future?”

Ryan: “It means we have a diminished country. It means for the first time ever in the history of this country, we will give our children and our grandchildren a lower standard of living… we will sever the legacy of leaving our children better on. And all of this deficit and debt today actually slows down our economy… because every time we have these big deficits like we have now, that simply means big tax increases and big interest rate increases tomorrow… So it’s not just damaging the future for our children, it damages the economy today.”

As Ryan points out, the Congressional Budget Office’s own computer simulation model predicts that if nothing is done, our debt “actually, literally crashes our economy” in 2037.

What’s causing our debt problem?

Ryan: “The reason we have all this debt is because too many politicians have been making empty promises to Americans about all of this borrowing and spending, and this is going to catch up with us. The question is: Will we get honest leadership and fact-based budgeting, stop the accounting gimmicks and all the fiscal sleight of hand and actually address this issue, fix this crisis before it really gets out of hand and out of our control?”

Exactly much have politicians over-promised?

Ryan: “The Government Acocuntability Office tells us we have about $88.6 trillion of unfunded liabilities. That means we are $88.6 trillion short of being able to fulfill government’s promises that are being made to everybody in America today.”

The biggest drivers of that deficit — Medicare, Medicaid and Social Security (in that order) — are projected to ultimately consume 100 percent of tax revenue within the next 30 years. Absent meaningful reform, our entitlement programs are simply unsustainable.

Ryan explains: “We’re going from 40 million retirees in America to 77 million retirees in America. And these are pay-as-you go programs — current workers pay current taxes for current beneficiaries. So when you have a 100 percent increase, virtually, in beneficiaries, but only a 17 percent increase in workers paying into those programs , that’s part of the problem.”

A problem that is getting worse to the tune of $10 trillion per year. That is why Republicans plan to step up and lead on the issue, by releasing a 2012 budget that includes meaningful reform to entitlement programs. President Obama, on the other, has decided to sit on the sidelines and issue languid proclamations about the need for a “conversation” about entitlements, after completely ignoring the recommendations of the bipartisan deficit commission that he appointed to do just that.

The importance of acting now, Ryan says, is to ensure that current and near-retirees will not be affected. If we wait any longer, that won’t be the case. Deep and sudden cuts will be imposed on us the way they were imposed on countries like Greece.

Ryan: “If you’ve already retired or you’re about to retire and you’ve organized your lives around Medicare and Social Security, what we will do is preserve those benefits for you just like they are today and then reform them for future generations so that they can actually rely on them, because they are going bankrupt… If we do it now, we do it on our terms, meaning we don’t change anything for people in and near retirement. But if we wait, if we keep delaying and kicking the can down the road, then it will look like Europe — bitter austerity. Cuts will happen to current seniors, and that’s what we want to avoid.”

Ryan is on a mission now to educate not only the American public, but also Republican lawmakers, particularly freshmen, as to the size and scope of the debt problem and how to go about solving it, and perhaps more critically, how to sell those solutions to their constituents. To that end, he has been conducting “listening sessions” with House Majority Whip Kevin McCarthy (R., Calif.) and Deputy Whip Peter Roskam (R., Ill.), which I wrote about here.

To see the slides Ryan uses in his presentations, go here.

And there’s plenty more here.



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