Sept. 24 (Bloomberg) -- House Budget Chairman Paul Ryan predicted a congressional supercommittee will fall short of its goal of finding $1.5 trillion in savings, while saying it should be able to find roughly half that without raising taxes.
Finding $600 billion in budget cuts ought to be “pretty easy,” said Ryan, pointing to a requirement for automatic cuts of $1.2 trillion, from both defense and nondefense programs, beginning in 2013 if the committee fails to meet its target.
“I think there will be” an agreement, though “I don’t know how large it will be,” Ryan said in an interview on Bloomberg Television’s “Political Capital with Al Hunt” airing this weekend. Ryan, architect of a plan to replace Medicare with subsidies to help the elderly buy insurance, said he expects his party will stand by that proposal.
“We can show many different ways of arriving at $1.2 trillion in spending cuts,” said Ryan, noting that an effort overseen by Vice President Joe Biden came close to that. “We’ve had talks earlier that got very close to that number, so I’d like to think we can get pretty close.”
He said President Barack Obama’s $447 billion jobs proposal is probably dead, including his call to extend and expand a payroll tax cut expiring at the end of this year.
Ryan criticized the payroll tax cut, saying “temporary tax rebates, we have learned from the Bush and the Obama administration, did not work very well.” Ryan said, “I’m fine with the idea of people keeping more of their own money, but we would like to go with ideas that are proven to work, not ideas that are proven to fail.”
Asked about presidential candidate Jon Huntsman’s proposal to eliminate tax breaks including the home-mortgage deduction, Ryan said, “You don’t have to do that in what we proposed.” He said the U.S. should have a “two-tier flat-tax system that fits on a postcard” for those who prefer that. Taxpayers should also have the choice of the current system, he said.
Policymakers ought to be able to agree on several free trade agreements as well as a corporate tax overhaul that would help produce jobs, he said. “Those are a couple of things that the president said would create jobs that we agree with,” said Ryan, a Wisconsin Republican.
A Bloomberg News poll released last week found 57 percent oppose Ryan’s Medicare plan while 37 percent support it.
Yet “we just won two special elections where this was a big piece of the debate,” Ryan said. “The program’s going bankrupt -- you’ve got to do something to save the system.”
While Republicans have called Obama’s proposals to raise taxes on the wealthy class warfare, Ryan rejected suggestions that his own budget plan -- which would slash taxes for the rich as well as funding for food stamps and other low-income assistance programs -- also amounts to class warfare.
The difference, he said, is “the president is using rhetoric that divides people, that preys on people’s sense of anxiety, fear, envy.” He said: “what we’re trying to do is appeal to people’s sense of hope, aspiration. We want an equal- opportunity society. We want a society of upward mobility, and that is what we’re striving for.”
Ryan added that spending on food stamps, Medicaid and other programs for the poor would continue to rise under his budget, which also calls for cutting Medicare benefits for the wealthy.
Ryan declined to endorse Republican presidential candidate Rick Perry’s likening of Social Security to a Ponzi scheme.
“It’s not the word I would choose to describe it. Ponzi was a criminal enterprise,” Ryan said. “Obviously that’s not the case with Social Security.”
“But there are problems with it, with Social Security, that we all acknowledge. It’s going broke,” he said. “If we do nothing,” then “a critical program that millions of people rely on, and the next generation, will get a bankrupt system and so let’s save it.”
--Editors: Robin Meszoly, Laurie Asseo
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