Ryan on revenue

For months, congressional Republicans have said they would rather do anything than lower the deficit with new revenue. They felt so strongly about this, GOP officials at least claimed to fully prepared to cause a national default if Democrats pursued a “balanced” approach to debt reduction.

The fight over the debt ceiling is, of course, complete until 2013, but with the so-called Super Committee poised to get to work fairly soon, Republican hostility towards revenue continues to be of critical interest.

On “Fox News Sunday” yesterday, Chris Wallace pressed House Budget Committee Chairman Paul Ryan (R-Wis.) on his “open-mindedness.” The host posed a hypothetical in the event that Ryan is one of the 12 members of the panel: if Democrats offered $3 or $4 in cuts for every $1 in revenue increases, the revenue came from closed loopholes and eliminated deductions, could Ryan accept a compromise?

Ryan eventually said “the answer is yes,” but it’s all of the caveats that came with the answer that matter.

“It all depends on the spending side of the ledger. Here’s what I mean when I say that: can you get higher revenues through broad based tax reform that gets more economic growth and therefore higher revenues. The answer I believe is yes.

“The question really is, and we have yet see a response to this question, are we doing the things we need to do to get the spending line down, down to 20 percent of GDP. It’s going to 40 of GDP by the time my kids are my age. And we have yet to see three to one, two to one, four to one, whatever you call it. We have yet to see any commitment to actually bring the spending line down.

“So if you’re just raising revenues to chase ever higher spending that is not good policy. And I don’t think that’s a good agreement. If we are convincingly restructuring these entitlement programs and getting that spending line down to meet that revenue line, then can you have higher revenue growth through more economic growth and tax reform, yes — the answer is yes.”

It’s tempting to think Ryan’s ultimate openness to new revenue is evidence of progress, but a close look at the language suggests little reason for optimism.

As the right-wing Wisconsinite sees it, Democrats can have their new revenue if the revenue comes by way of policies Republicans like. Ryan sets an absurd goal — lowering spending to 20% of GDP — and ties this to smoke and mirrors. Note that first paragraph in particular: revenues must come from economic growth. Given the Budget Committee Chairman’s record, he’s arguing that his right-wing policies will be so effective, they’ll grow the economy, and that’s how Democrats can have their revenues.

It’s best to keep expectations surrounding the Super Committee very low. The panel’s inevitable failure appears quite likely.