Paul Ryan's Fiscal Failures

Plus, the cost of war in Syria By Yuval Rosenberg and Michael Rainey Paul Ryan Heads for the Exit House Speaker Paul Ryan [announced]( Wednesday that he won’t seek re-election this year and will retire at the end of his term in January, becoming the most prominent in a wave of Republican lawmakers who have said they will leave Congress in the runup to dicey midterm elections. Ryan was drafted by his colleagues to succeed John Boehner as speaker in October 2015. His retirement, at the age of 48, will have broad political ripple effects. He’s leaving at a time when Republican control of the House after the midterm elections appears to be in doubt and with the party still riven by simmering internal tensions — and at a moment when the relationship between congressional Republicans and President Trump is the subject of much criticism and scrutiny. “Ryan is leaving a Republican conference that is arguably more splintered than when he got the job, this time along new lines: Trumpers and non-Trumpers,” The Washington Post’s Amber Phillips [writes](. “So when Ryan retires at the end of this year, House Republicans will face another fork in the road: Do they fully embrace President Trump's Washington, or do they try to find another uniter who can try to hold onto everything the Republican Party was before Trump, too?” As the party looks to chart its path forward, Ryan’s announcement will set off a race for the leadership of the House Republican Conference, with House Majority Leader Kevin McCarthy and House Majority Whip Steve Scalise mentioned as likely contenders. As that jockeying plays out, the election looms large. And while Ryan pledged to help his fellow Republicans in their efforts to keep control of the House, and said he believed the conference is “in good hands with what I believe is a very bright future,” his departure could be another blow to the GOP’s election prospects, sapping morale and possibly dampening fundraising. Ryan’s Fiscal Legacy: Lots of Red Ink Trump [tweeted]( Wednesday that Ryan “is a truly good man, and while he will not be seeking re-election, he will leave a legacy of achievement that nobody can question.” Fact-checkers might take issue with that last part. Ryan has been in Congress for nearly 20 years, serving as chair of the House Budget Committee for four years and as head of the tax-writing House Ways and Means Committee for 10 months before becoming speaker. For much of that time he has been held aloft as the Republican Party’s primary budget wonk and policy visionary. He was the architect of the party’s controversial budget blueprints, warned frequently about the dangers of deficits and rising debt and consistently championed tax reform as well as sweeping changes to entitlements programs, including plans to partially privatize Medicare. Ryan on Wednesday pointed to two achievements he considered his biggest accomplishments as speaker: the major overhaul of the tax code enacted last year, which he called “something I’ve been working on my entire adult life,” and increased military spending, which was part of the spending bill passed last month. Conservatives were effusive in their praise for Ryan on Wednesday. “When it comes to fiscal legacies, no speaker of the House has a record even approaching that of Paul Ryan,” Ryan Ellis, tax policy director for the Conservative Reform Network, wrote at the [Washington Examiner]( citing three major accomplishments: tax reform, spending cuts enacted as part of the Budget Control Act of 2011 and drawing attention to entitlement reform — “normalizing” the idea, as Ryan himself put it Wednesday. Senate Majority Leader Mitch McConnell (R-KY) called Ryan a “transformational conservative leader” and House Financial Services Committee Chairman Jeb Hensarling (R-TX) said Ryan’s efforts will have lasting effects: “He’s been working on fundamental tax reform for 20 years and now he’s gotten it done. He’s been working on entitlement reform. It may not happen on his watch but they were working on Obamacare before Obama was even born,” Hensarling [said](. “Some of these ideas will be achieved in one Congress, some will take many congresses. But he was the one who really showed the way.” But criticism from the left has been voluminous, and [cutting](. Here’s [Vox’s Matthew Yglesias]( for example: The dream of Social Security privatization that launched his policy relevance is dead. The Medicare privatization plan that relaunched his policy relevance is also dead. His reputation as a deficit hawk has been exposed as a sham. He didn’t repeal the Affordable Care Act, and he didn’t undo the Obama administration’s financial regulations. The year isn’t over yet, but Congress has basically abandoned hope of doing anything else. Even the GOP tax overhaul, Yglesias notes, didn’t follow Ryan’s preferred “high-minded” model for fundamental reform, as Republicans opted for large, deficit-financed tax cuts instead. The bottom line: Yes, Ryan helped push through a massive tax cut package with remarkable speed, but by several measures his immediate fiscal legacy is largely one of failure. “Ryan fell well short of achieving his most cherished goal: Revamping U.S. entitlement programs — Social Security, Medicare and Medicaid — that absorb an increasingly large share of annual budgets,” MarketWatch’s Jeffry Bartash writes, adding that Ryan’s retirement signals that changes to those programs are “dead.” Meanwhile, deficits have risen from $438 billion in 2015 to a projected $804 billion this year, and are on a path to surpass $1 trillion in 2020 and climb higher from there. The debt held by the public has risen from $13.04 trillion on the day he became speaker to [$15.46 trillion]( now. Politico’s Michael Grunwald looks at Paul Ryan’s legacy of red ink [here](. The subtitle on his piece: “The speaker of the House’s reputation as a budget hawk has somehow survived his actual record.” Ryan “spent two decades in Congress talking about reining in Washington’s profligate ways and overhauling the nation’s ballooning entitlement programs. He touted those views as the GOP’s vice presidential candidate in 2012. He will depart Congress with his goals undone,” The Washington Post’s Erica Werner and Damian Paletta [write](. “Ryan has sounded the alarm about the nation’s deficit and debt for years, but leaves the situation worse than he found it despite proposing a series of budgets over the years that slashed spending and transformed Medicare into a voucher program for younger Americans.” Quote of the Day “None of us have covered ourselves in glory. This Congress and this administration likely will go down as one of the most fiscally irresponsible administrations and congresses that we’ve had.” — Sen. Bob Corker (R-TN), at a Senate Budget Committee hearing Wednesday on the Congressional Budget Office’s updated economic outlook. Corker [added]( that, if CBO's projections prove correct, his vote for the Republican tax plan last year "could well be one of the worst votes I’ve made." Tax Cuts and Teacher Strikes Thousands of public school teachers in Oklahoma entered the 10th day of their strike on Wednesday, part of a wave of labor protests by educators around the country. West Virginia teachers went on strike last month, inspiring ongoing protests in Arizona and Kentucky. Michael Leachman, the director of state fiscal research at the Center on Budget and Policy Priorities, [wrote]( recently that he sees a common fiscal thread in this labor unrest: “excessive state tax cuts that have shrunk state revenues and thereby made it harder for states to devote adequate resources to education.” Oklahoma, Leachman writes, started cutting personal income tax rates in 2004 and reduced taxes on oil and gas production, driving the state’s annual deficit to $1 billion by 2016. Arizona has also reduced taxes in recent years, cutting its personal income tax rates by 10 percent and corporate tax rates by 30 percent. As a result, the states' general funds have taken significant hits over the last decade, down 35 percent in Oklahoma and 30 percent in Arizona. While the states experiencing protests are among the most severely affected – Reuters [notes]( that they “have some of the lowest per-student spending in the country” – the effects of reduced public revenues and spending can be seen in national data as well. Annual average public-school teacher salaries in the U.S. fell by more than $2,000 between 2003 and 2016, according to data from the National Education Association [cited]( by Vox: Salaries are only part of the issue, though a significant one — Oklahoma educators are calling for a $10,000 per teacher pay increase, while in Arizona the request is 20 percent. More broadly, teachers are also protesting rising health care costs, changes in pension programs, and a lack of funding for buildings, books and other essential supplies. Fixing the problem won’t be easy. Many of the states that have aggressively cut taxes in recent years have also made it hard to raise them again. “Reductions in state education funding largely due to tax cuts have limited pay and other resources for teachers,” Leachman writes. “And both Arizona and Oklahoma have supermajority requirements to raise revenue, which tend to lock in tax cuts once they’ve been enacted and make it difficult for these states to address shortfalls in education funding.” Send Us Your Tips and Feedback: Email Yuval Rosenberg at yrosenberg@thefiscaltimes.com and follow me on Twitter [@yuvalrosenberg](. Follow The Fiscal Times on Twitter [@TheFiscalTimes](. Cost of Syrian War Is Rising President Trump said last week that he wanted to remove U.S. troops from Syria as soon as possible, but resistance from the Pentagon [apparently]( changed his mind, and reports that Syrian forces have used chemical weapons are pushing the U.S. into potentially deeper engagement in the region, with additional military action expected soon. According to data from the Costs of War project at Brown University, cited by [Quartz]( Wednesday, the U.S. has already budgeted more money for Syrian operations in 2019 compared to 2018. The Defense Department expects to spend roughly $15.3 billion in Syria next year, the highest level yet, with the State Department accounting for another billion in foreign aid. 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Hedge-Fund Star John Paulson Owes $1 Billion]( – Wall Street Journal - [These 7 Charts Explain the Fight for Higher Teacher Pay]( – Money Views - [Republicans Have Finally Been Revealed as the Party of Fiscal Ruin]( – Peter Suderman, Reason - [Paul Ryan's Epic Fiscal Failure]( – Justin Fox, Bloomberg View - [Paul Ryan’s Most Important Legacy Is Trump’s War on Medicaid]( – Dylan Scott, Vox - [Paul Ryan Is Leaving Because He Lost the Fight for the Republican Soul]( – Dara Lind, Vox - [Don’t Be So Glad to See Ryan Go]( – Megan McArdle, Washington Post - [It’s Mueller, Not Trump, Who Is Draining the Swamp]( – Quinta Jurecic, New York Times - [Just Say No to the Balanced Budget Amendment and Yes to Rescissions]( – Jenny Beth Martin, Tea Party Patriots Citizens Fund - [The Looming Debt Crisis Will Hurt These Americans the Most]( – Benjamin Harris, Former Chief Economist for Vice President Joe Biden - [California’s Ambitious Plan to Regulate Health Prices, Explained]( – Sarah Kliff, Vox Copyright © 2018 The Fiscal Times, All rights reserved. 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