Spending is the Culprit

Opening Remarks delivered by Congressman Paul Ryan at the National Commission on Fiscal Responsibility and Reform:

Just about everything has been said but not everyone has said it. Let me try and say something a little different.

First to the two chairmen – Senator Simpson, Mr. Bowles – each of you has a great reputation of integrity, and I look forward to working with you in this effort.

Most of us were in Congress during the last economic crisis. That was a crisis where the Chairman of the Federal Reserve and the Treasury Secretary came rushing to the Hill in panic mode. We all got together and we governed in a panicked situation.

We have before us the most predictable economic crisis that we have ever had in this country. We all know that. We also are getting a good grasp of the size and the magnitude of this crisis. Sovereign debt crises are popping up all over the world, and we are kidding ourselves if we don’t think it could come to us next.

Here is one of the problems that we’re going to have to end up discussing: as we know, health care is the biggest part of this looming crisis. It doesn’t matter how you voted on this last bill, it’s law now.

We just took $529 billion of savings out of Medicare, not to go toward extending Medicare solvency, but to go towards a new entitlement. We just increased the size of Medicaid by a third. We now have a new health care entitlement. In entitlement speak we used to call it the “Big Three” – Medicare, Medicaid, Social Security. Now it’s the “Big Four”. That’s an issue we are going to have to talk about – what do we do about this new entitlement?

Also, just in this session of Congress, we have passed $1.8 trillion in new spending, coupled with $670 billion in new taxes. I would argue that our fiscal trajectory was bad and now it’s getting worse and that’s just from my own personal perspective.

I have put a number of ideas out there myself. I kind of think of myself as a canary in the mineshaft on entitlement reform. But if there is anything I’ve learned from my own experience, it’s that the American people are ready to be talked to like adults. They are ready to know the fiscal facts. If there is one thing we can accomplish with this effort, it is better public education about the nature of this problem and educating our colleagues in Congress on the nature of this problem.

I too, like [Congressman] Jeb [Hensarling of Texas] said, look at this with an open mind, not an empty mind. If you look at the math of all of this, spending is the culprit. Mathematically speaking, you literally cannot tax your way out of this problem. I don’t think we should go down that path of trying to tax our way out of this problem.

If you look at the Congressional Budget Office models of the future of our country, the economy shuts down mid-century. Their computers cannot think of any way out of this fiscal problem we have.

We know for a fact, it is irrefutable - we are giving the next generation an inferior standard of living. We have never done that before in this country. The legacy of this country has always been – you take on the challenges before you to make sure that your kids and grandkids have a better life. All of us agree on this legacy, but it’s going to take some heavy lifting to uphold it.

When you look at the spending problem, the sooner you act, the much better off you are going to be. Millions of our fellow citizens have already organized their lives around these programs. Acting very soon, you can assure that their lives will not be uprooted. They will not have the rug pulled out from underneath them. We can make prospective changes going forward so people have time to organize their lives around these reforms – running room so to speak. But if we keep kicking this can down the road and not confronting these massive spending challenges that kind of assurance to those who already organized their lives around these benefits, cannot be maintained.

We are in a situation where time is of the essence to deal with this. We have to spend our time on the spending side of the ledger because that is what is driving this. At the end of the day, the levels of personal and economic freedoms, standards of living, jobs, and international competitiveness have got to be the overarching concerns that drive the decisions we end up making.