Bloomberg News

Budget Crusader Ryan Stays Silent in Fiscal Showdown With Obama

January 03, 2013

As many U.S. House Republicans abandoned longstanding anti-tax and spending principles to back a bill designed to head off an economic crisis, one voice was virtually silent: Paul Ryan, the 2012 vice presidential nominee.

The House Budget Committee chairman who rose to prominence on a singular issue -- slashing federal spending -- hardly spoke out at party meetings or in public as it became clear that, after the Nov. 6 election, he was in a losing battle to champion his budget-cutting doctrine, according to several Republicans.

Ryan, a top prospect for the party’s 2016 presidential nomination, voted to compromise the philosophy that’s powered his career, supporting Senate-passed legislation rather than risking a blow to the economy that could have punished his party. Hours before the vote, he suggested it wasn’t his place to obstruct a bill that raises taxes on 77.1 percent of households and increases spending by extending unemployment aid.

“Elections have consequences,” said Ryan, smiling and folding his arms as he eased into a closing elevator to dodge reporters’ questions. The 42-year-old Wisconsin lawmaker, who was Republican presidential candidate Mitt Romney’s running mate, issued a statement casting his vote as the lesser of two evils. “I commend my colleagues for limiting the damage as much as possible,” he said.

Identity Crisis

In a victory for President Barack Obama, the Republican-led House on Jan. 1 passed the bill to block more than $600 billion in tax increases and spending cuts, with 85 party members voting in favor of it. The measure was far from the dramatic rewrite of budget laws reflected in two blueprints that Ryan has sponsored as budget panel chairman that would have cut U.S. spending by $5 trillion to $6 trillion over a decade.

Many of Ryan’s colleagues reacted angrily to Republican support for the measure.

“It makes you wonder if we believed in the Paul Ryan budget in the first place,” said Representative Mick Mulvaney of South Carolina. “It’s easy to vote for stuff if you know it’s not going to pass,” he said. “It’s a dramatic about-face from just 18 months ago.”

Representative Connie Mack, a Florida Republican, called the vote “idiotic” hours before the balloting. “We’ve got a $16 trillion debt, over a trillion-dollar deficit every year,” he said. “This piece of legislation does nothing to cut spending.”

Identity Crisis

The lack of conservative leadership on spending cuts as part of a so-called fiscal cliff deal has shaken the identity of many in the party, according to some Republicans. The Senate- passed bill would delay the automatic spending cuts by two months and raises taxes on individuals earning more than $400,000 a year and households making more than $450,000.

The measure also ends a two-percentage-point payroll tax cut that has been in effect for two years and is the main reason why most U.S. households will face higher taxes this year.

In an unusual split, House Speaker John Boehner and Ryan supported the bill, while Majority Leader Eric Cantor and Whip Kevin McCarthy, the no. 2 and 3 Republicans in the chamber, voted “no.”

With the vote behind them, Republicans are now looking to do battle over raising the nation’s statutory borrowing limit, a fight in which Ryan will be given another chance to play a prominent role as the two parties work to overhaul U.S. tax and entitlement policy.

“Now, we must return our attention to the real problem: out-of-control spending,” Ryan said in the statement. He declined an interview request through spokesman Conor Sweeney.

Party Player

Having served as the vice presidential nominee, Ryan is a party player whose vote could have helped move dozens of other lawmakers to either support or kill legislation intended to preserve income-tax rates for most Americans and avoid a recession.

Florida Senator Marco Rubio, also among his party’s brightest prospects for the 2016 Republican presidential ticket, voted against the legislation that passed the Senate in the early hours of New Year’s Day. Rubio was one of five Senate Republicans to oppose the bill.

“Marco Rubio made it a much, much trickier challenge for Ryan,” said Dan Schnur, who worked on Arizona Senator John McCain’s 2000 Republican presidential bid and directs the Jesse Unruh Institute of Politics at the University of Southern California in Los Angeles. “Make no mistake about it, today was the first Republican primary of the 2016 presidential election.”

Mostly Silent

A number of lawmakers said Ryan was mostly silent as his party’s leadership spent weeks working alongside Democrats on legislation to raise taxes on top earners.

“I don’t recall him talking about it at all at any of these discussions,” said John Fleming, a Louisiana Republican. Republican leaders instead allowed the meetings to be a “good time” for rank-and-file members to express their opinions, Fleming said. According to an aide close to Ryan, the congressman worked behind the scenes with the leadership to try to mitigate the severity of the tax and spending increases.

Ryan has mostly played an advisory role instead of serving as a voice of dissent, said several lawmakers. “He is, bless his heart, a walking computer on his issues, so he’s very helpful in allowing us to know the numbers and how it’s working out,” said Wally Herger, a California Republican.

Still, the Senate bill isn’t the grand bargain on deficit reduction that lawmakers had wanted when they created the conjoined tax-and-spending deadlines over the past three years.

Averting Pain

It would merely avert most of the immediate pain and postpone Congress’ fiscal feud for two months -- until a February fight over raising the $16.4 trillion national debt limit.

Ryan’s budget blueprint, first released in 2011, would have curbed entitlements such as Medicare and Medicaid, the health- insurance programs for the elderly and the poor, rewritten the tax code, and cut back on food stamps and other social safety net programs.

Some lawmakers sounded fatalistic, saying leaders like Ryan have little choice but to step aside and allow a vote.

“They haven’t been muted; it’s just that we’re sort of in a box here at the last minute,” said Representative Joe Pitts of Pennsylvania. “We don’t have a lot of good options.”

The Republican Tea Party wing undercut its own budget- cutting drive by weakening Boehner’s hand in negotiations with Democrats, said Representative Steve LaTourette, an Ohio Republican like the House speaker.

Self Inflicted

“We got here through a series of self-inflicted votes,” LaTourette said. “Every time after the Ryan budget you don’t give the speaker 218 Republican votes, he has no leverage in any discussion he has with Harry Reid, Nancy Pelosi or the president,” he said.

If the House had blocked the legislation, polls show the Republicans would have taken the blame for any adverse reaction in the equity markets or economic shock that might have resulted from the sudden tax increases and spending cuts.

Unlike Rubio, Ryan holds a leadership position in the House and his vote influenced how others decided. His vote gives “a lot of people cover within the party,” said Stu Rothenberg, editor of the nonpartisan Rothenberg Political Report in Washington.

“He’s in an awkward position because it’s a compromise bill, and therefore it’s not palatable to a huge chunk of the party,” he said. “If you want to run for president in four years you do have to think about this.”

On Jan. 1, as Ryan emerged from an hour-long meeting on the legislation, a reporter shouted to remind him that Rubio had opposed the bill.

“Happy New Year,” Ryan said with a smile.

To contact the reporter on this story: Heidi Przybyla in Washington at hprzybyla@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net


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