Los Angeles, CA – Earlier this week, American Idea Foundation President and former Speaker of the House Paul Ryan was a featured panelist at the 2024 Milken Institute’s Global Conference. While there, he spoke with Yahoo Finance’s Brian Sozzi and Akiko Fujita in a wide ranging interview on Yahoo! Finance. Recaps of Ryan’s comments can be found below, and excerpts of his responses follow.
- Article: Former Speaker Paul Ryan on GOP ‘nihilists’ and Trump’s economic plans
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On Mike Johnson, the foreign aid supplemental, and the Motion to Vacate:
“With a tight margin like this, who you have a few nihilists who are not interested in seeing their team succeed but building a brand for themselves, this is the kind of behavior you’re going to get. If Rep. Marjorie Taylor Greene does this… she’s not going to succeed because [Democratic House Leader] Hakeem Jeffries, rightfully so for the institution’s sake, said they are going to table this. So, this won’t succeed, but it’s a nihilistic approach that some of these members are taking and it makes the place ungovernable.
But even knowing it was potentially going to cost him his job, Mike Johnson still did the right thing. I’ve always said you can’t be good at these jobs unless you’re willing to lose them. You fight for the institution. You do what you think is right, and that’s exactly what Mike Johnson has done.
He’s new to the job, but he’s scaled the learning curve very fast. I’m very proud of him. He’s a smart and decent man who tried his best to bring his team around, irrespective of the fact that he knew they were going to come after his job and threaten him like they just did his predecessor, he went forward anyway and passed this package. That’s what leadership looks like. It may cost him the job in this next term, but he did it anyway and that, to me, is heartening. Our institutions still work.
We have leaders stepping up and doing the right thing, not every time, but in this case, that’s what happened and shame on people who think they should vacate a speaker for a policy disagreement, for simply doing his job.”
On whom he is voting for in 2024:
“I understand the binary argument. It’s a reasonable argument. I just don’t agree with that argument. Character is just too important to me. It’s a job that requires the kind of character that [Trump] just doesn’t have. Having said that, I really disagree with Biden on policy. I wrote a Republican in last time and I’m going to write-in a Republican this time… I don’t know who yet.”
On the dysfunction in Washington impacting business decisions:
“It adds to the “uncertainty tax.” There’s a lot of uncertainty about who is going to be President. There’s a lot of uncertainty about what the tax code is going to look like after 2025. This creates a lot more of that uncertainty. In this case, it is: Are we supporting our allies? What is the war in Ukraine going to look like? This affects agricultural markets and affects a lot of things with respect to supporting Ukraine and Israel. So, just getting the [foreign aid supplemental] through took 4-5 months and that creates a lot of uncertainty and so, [the dysfunction] just adds to the uncertainty tax.”
On a lack of Presidential leadership on the debt:
“Trump and Biden are both promising that they are not going to do anything about this. Not only are they promising not to do anything about this, but they are also demagoguing those who are offering solutions. They are running against these people, trying to scare seniors by going after people who are proposing these reforms.
You have to reform these entitlement programs to prevent their insolvency and to prevent their bankruptcy. Medicare and Social Security go bankrupt within a decade and that hurts current seniors. Proposing to do nothing about that, like Biden and Trump are doing, hurts those seniors. And so, leaders in Congress, it’s bipartisan with both Democrats and Republicans saying we have to do something about this, but the two guys running for President are demagoguing on this. That to me is very frustrating. It’s kind of scary, because we are walking ourselves into a very predictable debt crisis and that’s bad for everybody. Everybody gets hurt under a debt crisis. The economy suffers, seniors suffer, people living on the safety net suffer so the smart thing to do, knowing bankruptcy is coming, is get over this.
Let’s pass reforms that are phased in, which don’t affect current seniors, and which stop bankruptcy from ever happening. This is what a serious government would do. This is what serious politicians would do, but that’s not we have right now.”
On the notion America can tax its way out of a debt crisis:
“You can’t tax your way out of this problem. The numbers are just so big. You can’t cut the Pentagon and you can’t raise a bunch of taxes and come close to solving this problem. The drivers of the debt are these entitlement programs, namely Medicare, Medicaid, and Social Security.
Now, the good news about all of this is: 1) it’s totally within our control as a country to solve these problems; 2) you can solve these problems without affecting current seniors; and 3) we have learned a lot since we started these programs in the 1930’s, the 1960’s, and the 20th century on how to deliver these benefits. We have got to modernize these programs so the next generation can still have a good safety net and can still have health and retirement security, but you have to reform these programs on a go-forward basis and that can be done.
Raising taxes doesn’t even come close to solving the problem. Can you get a higher revenue line without doing damage to the economy? Yes, I think you can but that’s more of a tax reform question, but if you do what Biden is proposing which is to have effectively a 50% capital gains tax, that’s going to hurt small businesses with a giant tax increase. That’s going to kill economic growth.
Here’s the last thing I’ll say: You can’t solve this without a growing economy so if you’re going to play with taxes, you have to be careful and do it in a way that keeps the economy growing. You can’t take your eye off the ball which is spending and it’s the way these programs are designed. You can fix them on a go-forward basis without affecting current seniors. If you start soon, you can dodge a debt crisis.
It’s the most predictable economic crisis we will have ever had in this country and frankly, we’re not doing anything about it. That is really disappointing.
On the extension of the TCJA and the need to extend Section 199-A for small businesses:
“Let’s look at what expires: It’s the individual side of the code. It’s not the corporate side of the code, so it’s all those tax crates on families. If you raise those tax rates, you’re going to hurt economic growth.
I could see a deal where the top rate goes up to 39.6% from 37%, which is kind of a rounding error on the numbers, but I can’t imagine either Biden or Trump in divided government, which is what I expect we’re going to have, allowing those tax cuts to expire.
The thing that is not getting covered much is something we call Section 199-A. It’s kind of an obscure provision but when we lowered corporate rates to be commensurate with the rest of the world and to be globally competitive – which was working — we also lowered the tax rates on what we call pass-throughs, sub-chapter S corporations, sole proprietorships, and LLCs which are about 80% of American businesses. They got a corresponding rate decrease so that they were on par with corporations.
Now, think of the person in Janesville, Wisconsin who owns the Ace Hardware competing against Home Depot. Do we want to let that person’s tax rates go back up to above 40% when Home Depot’s is at 21%? I don’t think we want to let that happen but that is what happens if you let Section 199-A expire, which Biden is proposing to do. I think that’s devastating to small and medium sized businesses. It’s really bad for economic growth. I think they need to extend Section 199-A and I think they will extend it because raising taxes on all these small businesses across America is not good economics.
On Trump’s second term economic agenda & why it’s preferable to Biden’s:
“Well, across the board tariffs are not good for the economy. Fighting China is good and necessary, and both of these guys are going to fight China. I think that’s fairly bipartisan. If you look at the House Select Committee with Raja Krishnamoorthi and Mike Gallagher, they put together a Venn Diagram of bipartisan China policy that I think either Administration is going to be effective and committed to fighting China. But I think a 10% tariff across the board is terrible economic policy. It’s a 10% tax on American consumers, making our businesses less competitive so I don’t think that’s good policy but Biden’s proposing this massive tax increase on medium and small-sized businesses. So, is it any wonder I don’t like either of these guys?
I’m a person who is saying, I’m not for Trump but his economics are better than Biden’s. If you’re asking me which is better? I think Trump because he’s better on taxes. I don’t like a lot of the tariffs and that can be done by a President, but I think he’ll be better on regulations and taxes.
The problem with Biden is he went left. He wasn’t the moderate the swing state voters in Wisconsin thought they were getting. They got this progressive. He’s got ideologues in the executive agencies killing energy production, proposing big tax increases so that’s not a very attractive economic agenda.”