PJ Media

Rep. Ryan: We Are on the Path to 'Debt Ruin'

One day after assuming office as new chairman of the House Budget Committee, Rep. Paul Ryan (R-WI) spoke out in an unscripted conversation about Republican plans to shrink the federal budget, lower taxes, tackle runaway entitlement programs, and seek tax reform. Eschewing formal press conferences or numbing presentations, the young chairman decided to explain his vision and strategy in an unusual casual “conversation” at the National Press Club in Washington, D.C. He sat down on an unadorned stage with the Wall Street Journal’s editorial page editor, Paul Gigot.

PJTV provided the only televised coverage of the entire hour-long exchange, and was the only broadcast network to show the proceedings live from the nation’s capital. The talk touched on a wide range of economic policy issues that will affect every American’s pocketbook and the financial health of future generations.

At the session Ryan warned that current high levels of spending are “putting us on a path of debt ruin, of a social welfare state.” He called for Congress and President Obama to pledge to become “a debt-free nation with a safety net, rather than a welfare state” like those in crisis-ridden Europe.

As House Budget Committee chairman, Ryan has been tapped by congressional Republicans to rewrite the federal budget and create a new blueprint by March 4. Ryan explained how he is approaching the task and his effort to find common ground with the Obama administration: if Congress wants a new program, he said new spending rules will force a cut or elimination of spending elsewhere.

While not committing himself to any number, including the $100 billion spending cut Republicans promised during the election, Ryan said his new budget would surprise the public. “We’re going to have really low numbers,” he told the audience at the National Press Club.

Each year, the government spends $1 trillion more than it takes in. By this summer the U.S. Treasury will have reached its legal debt limit of $14 trillion. Congress will have to approve a new debt limit or face government-wide shutdowns. Saying government has to live within its means, he called raising the debt limit a national “moral issue.”

He also warned state governments — like California — not to expect a federal bailout. He said some governors are insinuating that there is an implicit suggestion their debt is backed by the federal government. He retorted that they are not: “Should taxpayers in frugal states bail out taxpayers who are not in frugal states?” he asked.  No, to do so would constitute “a moral hazard.”

The new chairman also discussed finding possible common ground with the administration on trade, health care, immigration, and energy policy.

“At the end of the day, I think there are large chasms, differences of opinion of governing philosophies,” between Republicans and Democrats, he told the audience. “So I think we owe it to the country to give them a choice, an alternative future of the country,” he said. “Then they will have a very clear choice, a choice of two futures.”

The event was co-sponsored by the Manhattan Institute and E21, a new economic education non-profit.