Rep. Paul Ryan, the face of the GOP’s efforts to scale back the size of the federal government and trim the federal deficit, was booed by some Wisconsin constituents this week, but not for the reason you might think.
Ryan’s budget plan, as overwhelmingly approved by the House, would convert Medicare into a program which would provide seniors with subsidies to purchase private health insurance. But as Ryan returned home along with the other 240 Republican members to explain the budget blueprint to voters, he received heat not for the Medicare proposal, but for his call to cut taxes for wealthy Americans.
The liberal blog Think Progress videotaped the town hall meeting held by Ryan in Milton, Wis. One participant asked the congressman about rising income inequality in the United States and why Ryan supported making the Bush-era tax cuts for high-income Americans permanent and why he opposed raising the wage cap on Social Security.
“You have the lower spending,” the man said, “but it’s a matter of there’s nothing wrong with taxing the top because it does not trickle down.”
“We do tax the top,” Ryan replied, at which point the group responded with a chorus of boos. “Let’s remember, most of our jobs come from successful small businesses. Two-thirds of our jobs do. You got to remember, businesses pay taxes individually. So when you raise their tax rates to 44.8%, which is what the president is proposing, I would just fundamentally disagree. That is going to hurt job creation.”
As part of his own deficit reduction proposal, President Obama has called for letting the Bush-era cuts for the nation’s top earners expire, which would increase the top tax rate from 36% to 39.6%.
Last year’s congressional compromise, which extended the cuts for two years until the end of 2012, cost the federal treasury $120 billion. The nonpartisan Congressional Budget Office estimated last year that making the cuts permanent would add $3.3 trillion to the deficit. Ending the cuts for the wealthy would add $700 billion to the treasury over 10 years, the CBO said.
Ryan’s plan would lower the top tax rate to 25% while eliminating many of the shelter and loophole provisions in the tax code, which, he says, would help make up for the lost revenue.
Polls have shown widespread support for increased taxes on the rich. And the response that greeted Ryan in Wisconsin shows that the battle over taxes, as well as the fight over the future of Medicare and other entitlements, are likely to play a major role in the 2012 elections.
It also brings into sharp relief the delicate line House Republicans may be walking with the aggressive fiscal and social policy agenda they have pursued since seizing the House.
A Washington Post/ABC News poll released this week showed that House Speaker John Boehner’s disapproval rating had spiked to 40%, up from 27% in January when he took the gavel. His approval rating, however, still stands at 43%, superior to Senate Majority Leader Harry Reid’s, and roughly equivalent to the president’s.
The vote last week on Ryan’s budget and his plan for Medicare has been gleefully pounced upon by Democratic operatives, who want to use it as a fulcrum in a bid to regain the more than 60 House seats lost in November’s election.
The vote was viewed as politically and perhaps unnecessarily risky. The Ryan plan will go nowhere in the Democratic Senate. Some likened it to a June 2009 vote former Speaker Nancy Pelosi pushed on Democrats in her caucus to approve an ambitious carbon emissions bill. The measure barely passed, was buried in the Senate, and a swath of members from coal states were expelled from the House.
Nathan Gonzales, a House analyst with the Rothenberg Political Report, said the House GOP has to proceed cautiously, particularly on Medicare, or risk losing its newly gained majority. Polls consistently show that a large majority of Americans oppose significant changes to the program.
“Republicans have to be careful about being narrowly defined on the Medicare issue. If the 2012 elections are a referendum on whether you like Medicare or not, the election will be a disaster for Republicans,” Gonzales said.
But, he said, Boehner and Ryan right now are in the spotlight because the 2012 presidential race has yet to heat up on the Republican side. “By the time we get to the summer and fall of 2012, the Republican Party will be rebranded and defined by the GOP presidential nominee,” he said. “We don't know yet if that will put Republican members in a more or less vulnerable position because we don't know who that person will be.”