Ryan’s Charge Up Entitlement Hill

The GOP’s fiscal leader explains why House Republicans will vote to reform Medicare and why the public is ready to listen.By PAUL A. GIGOT

http://online.wsj.com/article/SB10001424052748704546704576151082208100302.html?KEYWORDS=PAUL+GIGOTPaul Ryan doesn’t look like the menacing sort. He’s amiable in a familiar Midwestern way, his disposition varies between cheerfully earnest and wry, and he uses words like “gosh.” Yet to hear Democrats tell it, the 41-year-old Republican congressman is the evil genius, the cruel and mad budget cutter who threatens grandma’s health care, grandad’s retirement, and the entitlement state as we know it.

Senate Democrats like Chuck Schumer issue almost daily press releases attacking Mr. Ryan, Paul Krugman is obsessed and demeaning, and even President Obama can’t stop mentioning him. Only this week, the president justified his own failure to tackle entitlements in his dud of a 2012 budget by saying that “the chairman of the House Republican budgeteers didn’t sign on” to the final report of Mr. Obama’s deficit commission.

What are they all so afraid of?

“Did he really say that?” asks Mr. Ryan about the president, sitting in his House office this week after another day of the hearings he now runs as chairman of the House Budget Committee. “I’m actually flattered.” Perhaps they’re worried, he says, “because we put out more than just bromides and platitudes. We put out specifics.”

He certainly has done that, most famously with his “Road Map” that is the full monty of conservative tax and entitlement reform. Mr. Ryan knows it won’t pass, not even in the current GOP House, but he drew it up in 2009 to start a debate and show that a future of limited government was still possible. He adds that he opposed the Obama deficit commission report because it failed to do anything serious about health-care entitlements, and he proposed an alternative that the commission rejected. Mr. Obama has never proposed his alternative.

Has the president ever called him to talk? “Never once,” he says, notwithstanding Mr. Obama’s many public statements that he wants “aggressive” conversations with Republicans, especially Mr. Ryan. “He keeps saying that,” says the Wisconsin native, but “they don’t talk to us. It just doesn’t really happen. I don’t know what else to say.”

So goes the reality of today’s Washington, especially after Mr. Obama dropped his budget this week that does almost nothing about everything. To call it a punt is unfair to the game of football. That abdication makes Mr. Ryan, by dint of his expertise and his influence with other Republicans, the most important fiscal voice in Washington. As supply-siders used to say—and Mr. Ryan came of political age as a protege of Jack Kemp—Mr. Ryan is now the man on the margin. He says he’s determined not to waste the opportunity, notwithstanding the huge political risks.

What’s the White House political calculation behind its budget? “The fiscal strategy is to hang on to all the government we’ve grown, and hopefully rhetoric will get us through the moment. It strikes me as a posture or position to keep the gains of the last two years in place—the bump up in discretionary spending, the creation of these new entitlements—to lock in their gains, bank their wins, and then hang on through the rest of this year. And they believe they have the flourishing rhetorical skills to navigate the politics in the meantime,” Mr. Ryan says.

He adds he was hoping for more, counting on at least some leadership on Social Security, but “we’ve seen triangulation in rhetoric, not in substance.”

>

Would he prefer if the president sat down to talk seriously about Social Security, Medicare or tax reform? “Oh, gosh, yes,” he says. “I think that would be great. It would be good for the country.” He resists details about how far he’d be willing to compromise with Mr. Obama—save to rule out a payroll tax increase—but he says he’s more than ready to talk details.

Paradoxically, however, he says the president’s budget has helped Republicans. By failing to lead with such a loud thud, Mr. Obama has helped the cause of reformers within the House GOP. Some in the leadership had been wary of taking on entitlement reform—that’s Medicaid, Medicare and perhaps Social Security—but this week tipped them over the edge.

“We have a lot of fiscal conservatives here. We have a determined caucus. . . . That is very helpful. We have a fiscal reality that is obvious and we have a president who is failing to lead. We feel duty bound to lead ourselves,” he says.

Along with conference chairman Kevin McCarthy, Mr. Ryan has been doing an internal road show for all 87 House freshmen and many senior members on the looming debt and entitlement crackup, three sessions a week, six or eight members at a time, 10 minutes of PowerPoint, 50 minutes of questions and “listening.”

He rolls out a chart comparing the debt trajectory under Mr. Obama’s fiscal 2010 budget (a line shooting almost straight up) and the GOP alternative he offered last year (a relatively flat line sending it back down from its Obama peaks). “That’s the chart that always gets them,” he says. Reforming Medicaid alone won’t get the deficit and debt on a downward path, he says. You have to tackle Medicare too.

“The freshmen have been the best thing going for us,” he adds. They pushed for more cuts in what’s left of the fiscal 2011 budget, “and that was fine with me.” He says these new members are fiscally better overall than the class of 1994, a lot of whom “went native.”

Being freshmen, however, they also haven’t experienced the full fury of the entitlement state backlash—AARP’s demagoguery, the Democratic attack ads, the media amplifying those attacks, and the fair-weather deficit hawks (including ostensibly conservative columnists) who will run for cover and blame Mr. Ryan for trying the minute the polls turn. Could Republicans be walking into a political trap?

“That’s what everybody says, but I don’t really spend much time thinking about it because I don’t really care. . . . All the political people tell us this. Even the Democrats tell us this. That it’s a trap, it’s rope-a-dope. . . . It doesn’t matter,” he says.

“The way I look at things is if you want to be good at this kind of job, you have to be willing to lose it. Number two, the times require this. And number three, if you don’t believe in your principles, and applying those principles, then what’s the point?” He mentions limited government and economic freedom. “I believe these are the best solutions. I believe they will result in growth and opportunity for the country.”

But why will this attempt at reforming entitlements be different politically than the marches into fixed bayonets of 1985, 1995 or 2005?

“Politically, I also believe it’s going to be the right thing to do. People want conviction politicians. People want the problem solved. People turn on their TV, they see the European debt crisis. They see California, New York, Illinois. They understand there is a sovereign debt crisis popping all over the place,” he says. “And to see a president duck and punt, and then try to use it as a political wedge against the opposing party to manipulate his re-election is not going to fly in this kind of climate.”

I told you Mr. Ryan was an optimist. “Traditionally,” entitlement demagoguery “would work,” he concedes, but the times are different. “It didn’t work in 2010. Ask the 87 freshmen who had this stuff thrown at them. And given the crisis we are in, and given that we are going to have a year and a half or two years of straight talking to the American people about how serious this is, and how we need to head it off at the pass, I like our chances.”

The seven-term congressman can point to his own political success as a precedent. I first met him nearly 20 years ago when he worked for Mr. Kemp, and later for then-Kansas Congressman Sam Brownback. The lawyer’s son returned home to Janesville, in southeastern Wisconsin, to run for a seat long held by the late Democrat and former Defense Secretary Les Aspin. It’s the definition of a swing district, with closely divided party loyalties and one of the highest union populations in the country. John McCain lost the district with 47% of the vote in 2008 while Mr. Ryan was winning 64% despite his firmly conservative voting record.

Mr. Ryan knows House Republicans won’t be able to get their most ambitious reforms through a Democratic Senate, much less past Mr. Obama’s veto. But his goal is to honor the GOP’s 2010 campaign promises while framing a 2012 choice for voters between two visions of the future.

One is the path Mr. Obama has set for the past two years. The other is a future of reformed entitlements, limited government, reduced debt—all in service to the goal of faster growth and more economic opportunity. Mr. Ryan figures the 2012 contest could turn into a “realignment election,” in which voters declare which party’s vision they prefer and give that party control of the entire government. The Republican thinks his party needs to offer such a choice because if Mr. Obama wins a second term, his health-care reform won’t be repealed and will set the U.S. on Europe’s path of excessive debt and shrunken destiny, perhaps irretrievably.

In reforming entitlements, one challenge for the GOP is making the case for growth, not merely budget austerity for its own sake. “We can’t use the pitch fork and torch approach,” he says. In 1995, Newt Gingrich famously said that traditional Medicare would “wither on the vine” under GOP reforms, and he seemed to welcome a debt-ceiling showdown. Democrats used both to portray the GOP as radical and turn public opinion against reform.

“It’s important that we’re the growth party, and cutting spending now is really not pain and root canal. Wait until we don’t do that and what happens later. The question we have for ourselves in this country is, do we reform government, reform our entitlement programs, get these programs that were written in the 20th century to work in the 21st century, and have pro-growth policies to help our businesses that make us internationally competitive?” he explained recently, in another interview I did with Mr. Ryan hosted by the e21 website and the Manhattan Institute.

“That’s growth. What austerity is, what pain is, is doing nothing, staying on the path we’re on. And then having our own debt crisis and having our own European kind of fix where you’re cutting everything and raising taxes.” He calls this a future of “managing decline.”

Mr. Ryan is also rare among Republicans in focusing on the dangers of reckless monetary policy. As early as 2003 and 2004, he was warning then-Federal Reserve Chairman Alan Greenspan about the dangers of negative real interest rates, not that anyone in the Bush Treasury paid attention.

This month, he asked current Fed chief Ben Bernanke tougher questions than he is used to getting about rising food and energy prices. Though advised in advance, Mr. Bernanke did not seem pleased. But Mr. Ryan is right to warn that growth can be undermined as easily by inflation and asset bubbles as by high taxes and overbearing regulation. Exhibit A is the credit mania and panic that undid the Bush administration and paved the way for President Obama and the destructive 111th Congress.

All of which invites a question: If the stakes for the country are so large, and the 2012 election is so critical, why doesn’t Mr. Ryan run for president himself? Weekly Standard Editor Bill Kristol has nudged Mr. Ryan to run, and emails arrive often in my inbox suggesting that Mr. Ryan do so.

“My head’s just not there,” he says. “I want to be at home for the weekend” with his wife, two sons and daughter, ages six, seven and nine. (He sleeps in his office when he’s in Washington during the week.) “If I could do it from Janesville,” he quips. Later, after I press, he adds, “You’ve got to really, really want to be president, and you’ve got to have the belief that no one else could do it. . . . I think there are other people who could do that.”

Such personal groundedness is admirable (and rare) in a politician, but about his last point, I am not so sure. The current GOP front-runners either don’t share Mr. Ryan’s convictions (Mitt Romney, Mr. Gingrich) or haven’t yet shown they can combine fiscal reform with a pro-growth, optimistic message (Tim Pawlenty, Mitch Daniels).

Perhaps one of those or others will adopt the Ryan message, the way Ronald Reagan so fortuitously absorbed Jack Kemp’s in 1980. But don’t be surprised, as the 2011 budget fight unfolds and the presidential campaign heats up, if more Republicans begin to ask why they shouldn’t get the chance to vote for the Janesville original.

Mr. Gigot is the Journal’s editorial page editor.