Trying to squeeze what he couldn’t get when he ran as former Massachusetts Gov. Mitt Romney’s VP in 2012, House Budget Committee Chairman Paul Ryan (R-Wis.) continued his plan to slash the federal budget. Both parties hope to avoid another game of chicken that cost the federal treasury $24 billion in the last budget and debt stalemate temporarily ending Oct. 16. Ryan wants to continue the Tea Party mission of preventing tax hikes and slashing the federal budget with the goal of scaling back government entitlement programs. Ryan’s mission was so blatant, so obvious and so ominous in 2012 that he sank Romney’s campaign. Now the 42-year-old Tea Party devotee hopes to get through the arcane budget process what he couldn’t get at the ballot box. Ryan and his Tea Party friends possess off-the-wall ideas about what’s good for the economy.
Forget about the 100% rise during Obama’s first term in the stock market, generating so much corporate wealth that the economy added back over 5 million jobs lost during former President George W. Bush’s 2007-09 Great Recession. Almost immediately, when picked Aug. 2012 by Romney for VP, Ryan proclaimed he’d take on Medicare and Social Security. When Romney’s poll numbers dropped like a rock, Ryan was muzzled—but the damage was done. Now Ryan’s the GOP enforcer for imposing draconic spending cuts known as the “sequester.” Despite told repeatedly by Federal Reserve Board Chairman Ben S. Bernanke and other leading economics that slashing government spending hurts the nation’s Gross Domestic Product, Ryan plans to go ahead with more cuts. Meeting on Capitol Hill with Senate Majority Leader Harry Reid (D-Nev.), Ryan looks unbowed.
Facing the 2014 Midterm elections, the GOP can’t push things to the precipice without potentially losing control of the House. House Speaker John Boehner (R-Ohio) while backing much of the Tea Party agenda, won’t let Ryan sink GOP chances in next year’s elections. “If we focus on some big, grand bargain then we’re going to focus on our differences, and both sides are going to require that the other side compromise some core principles and then we’ll get nothing done,” said Ryan, striking a more conciliatory tone. When Ryan talks of “principles” he referring to the Tea Party’s misguided idea that reasonable taxation and entitlement spending hurt economic growth. He tried his best, like Romney, during 2012 to sell voters on the idea that Obama’s economy was failing when every major government marker from the Fed, Labor and Commerce Departments said otherwise.
Ryan hasn’t acknowledged that federal budget deficits have been cut in two by Obama’s economic policies. When the GOP ranted about runaway federal spending in the past, it was always in the context to whopping federal budget deficits that hit $1.4 billlion when the economy bottomed out in 2009. When the Fed’s cheap interest rates helped propel Wall Street to new heights, businesses started hiring again, putting more folks back to work, reducing the unemployment rate, but, more importantly, generating more tax revenue to reduce budget deficits. If the GOP doesn’t tank the economy, the federal budget should be balanced in a few years. If the Tea Party gets its way and slashes more federal spending, the economy could double-dip, robbing the treasury of needed tax dollars. Despite indisputable proof of economic recovery, the Tea Party wants to slash spending.
If Obama learned anything from the recent impasse, it’s that the GOP likes to save face and pander to its constituents. Sen. Rand Paul (R-Ky.) threatened to filibuster Bernanke’s expected replacement 67-year-oldFed Vice Chairman Janet Yellin. Paul rants about Bernanke and Yellen’s “quantitative easing,” the Fed’s bond-buying program that saved the U.S. economy from lapsing into a new depression. When major banks ran out of cash in 2007-08, Bush, with the Fed’s help, bailed out major banks or would have watched the country go broke. Paul and Ryan opposed bailouts—including to the U.S. auto industry—and rant about the Fed spending $85 billion a month to keep U.S. banks liquid. Both rant about the national debt but don’t view it as economists as a fraction of the nation’s GDP. With unemployment shrinking, government revenues up and deficits dropping, they won’t acknowledge Obama’s success.
Ryan and the Tea Party’s plan to slash more government spending can only accomplish one thing: Plunging the economy back into recession. Just as voters rejected Romney and Ryan’s economic plan in 2012, the same plan makes no sense today. Neither Fed Chairman Bernanke nor any reputable economist believe Ryan’s budget does anything other that slow down growth, potentially plunging the nation back into recession. “So we aren’t focusing on a grand bargain because I don’t think in this divided government you’ll get one,” said Ryan, acting like there’s any logic to GOP budget proposals. Ryan hasn’t changed a bit today lunging feet first into a half-baked plan to retard economic growth. If he’d pay attention to improving unemployment, shrinking deficits, increased tax revenues and rising GDP he’d be forced to change economic directions.
About the Author
John M. Curtis writes politically neutral commentary analyzing spin in national and global news. He’s editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.