By: AIF Staff
London, UK – This morning, former Speaker of the House Paul Ryan talked with Bloomberg’s Francine Lacqua in a wide-ranging interview about his advice for executives as they think about a potential 2nd Trump or Biden term, the future of the U.S. economy and the U.S. tax code, and the 2024 election. Video of the interview is accessible here and some excerpts of Ryan’s responses follow.
2024 Election is “too close to call”
“I’m here in London as Vice Chairman of Teneo, a CEO advisory firm, and we’re basically advising our clients who see a lot of unpredictability on the horizon and they’re trying to scenario-plan for which way various governments are going to go.
It’s a little easier to predict here [in the UK], than it is in my country which has a razor-thin polling margin in our election. It’s just hard to determine who’s going to win the election [in the U.S.] so therefore, you have to scenario plan for two very different potential administrations.
I think it’s just too close to call. If you really want to look at it, this thing is tied in polling and will be going into the election. This is probably the likeliest of scenarios because, right now, Trump is polling at his peak and Biden is polling below his peak performance and let’s just assume Democrats come home at the end of the day, as they typically do, so it’s probably going to be a few hundred thousand voters in about five or six states that will determine the outcome of this election. My state of Wisconsin is one of those. Trump won it by 25,000 votes out of 1.61 million cast in 2016 and then in 2020, he lost it to Biden by 20,000 votes. It’s just that close and this is where campaigning makes the difference.
At the end of the day, it comes down to the new swing voter in America which is a suburban college-educated swing voter and let’s go back to Wisconsin, for example. Out of 1.61 million cast, 53,000 Wisconsinites — that’s what we call ourselves — in the suburban parts of Wisconsin didn’t vote for Trump but voted for every other Republican on the ballot and then 20,000 of those 53,000 voted for Biden giving him the 20,000-vote margin of victory that he got.
It’s just that close. It’s probably going to be Arizona, Nevada, Wisconsin, Michigan, Georgia, and Pennsylvania.”
The future of tax and trade policy
“On tax policy, personally, I think [a Trump Administration] would be much better and a lot of executives see it that way, because you have to remember that the tax law we wrote in 2017, the individual side of that tax code has many expiring provisions, some of which hit small and medium-sized businesses, and then we have some corporate provisions like the research and development tax credit and expensing provisions, those are all up for grabs.
The next presidency will help determine what happens there, so Trump’s going to be more pro-business on taxes. Biden is proposing to get rid of those things. And then, when it comes to tariffs, Trump is proposing a lot of tariff increases. Biden hasn’t reduced the Trump tariffs. He’s continued those tariffs, but I don’t think he’s proposing a whole new range of tariffs with respect to everything but China. On China, you basically have a bipartisan consensus.”
Concerns about nominees’ inaction on fiscal policy
“One of the reasons why I’m frustrated, like many Americans, about our choices for President is neither is proposing to do anything about the coming debt crisis in our country. Our debt is already as large as our economy. It’s going to go nowhere but twice as big as that. And so, we have an entitlement problem which is these entitlement programs are going bankrupt by the end of the decade and no one’s proposing to solve that. We have to get ahead of that, otherwise we’re going to have a debt crisis in America and it’s not inconceivable to have a treasury auction failure in a short period of time — like in the next 6-12 months probably after we’re done cutting interest rates….
Right now, both of our candidates for President aren’t proposing to do a single thing about it. I think the only shot we have, given the political reality, is an entitlement commission but one with teeth that requires Congress to vote on it.
I served on the Bowles-Simpson Commission, which was the last time we had one of these things, and it could be ignored by the President and Congress, and it was. So, you have to have an entitlement commission that says Congress is going to have to vote on this, up or down, no filibuster, no amendments, and then hopefully you have a President that’s willing to accept its results provided they’re substantial. That is, in my opinion, the best way we get out of this, short of Congress actually doing its job and fixing this problem in a way that gets us out of the ditch.
Uncertainty is the biggest challenge for business leaders
“I think uncertainty is the number one problem. There is so much uncertainty. There’s geopolitics. There’s NATO. There’s Ukraine. There’s Putin. There’s conflict with China. You have a war in the Middle East and then also, by the way, you have a bunch of tariffs that are being proposed, so you just don’t know what’s going to happen. We don’t know what anti-trust laws are going to look like if Biden gets a second term. Is he going to double down on a lot of regulations? You just don’t know.Not to mention all the geopolitical risks that are outside of any government’s control so that’s what CEOs are trying to prepare for.
You tell them to just be nimble and prepared for: Here’s what Door Number 1 looks like. Here’s what Door Number Two looks like. You want a contingency plan for both scenarios.”
Future of the Republican Party
“Well, I am still a Republican, of course. I consider myself an anti-establishment Republican. Trump has taken over the Republican Party and it’s really a populism without any anchor to principles.
I’m a big believer that you want your party pledging fidelity to a set of principles and policies that solve problems, versus a person, and I don’t think a personality-type populism is durable, so I do think at the end of the day, our party, like we have in the past, will have a big discussion about what we stand for, what are our ideas, what are our principles, and who are the best people capable of carrying those ideas forward.
That’s not the conversation we’re having right now but if Trump wins, he’s a one-term president. He cannot have a second term because he already had one, so I just don’t think it’s durable and I think we’re going to have to have a real calling as to what we stand for and if he doesn’t win, that conversation happens sooner rather than later.”
Stablecoins as a mechanism to help avert a debt crisis
“I think blockchain has a lot of use cases, so what I proposed the other day is that we should advance stablecoin legislation because stablecoins actually create a lot of new demand for US debt. We talked just a minute earlier about potential Treasury auction failures, well, it would be nice if we created more demand for our debt and if we had a law, which there is bipartisan support for in Congress, to advance stablecoins, I think that helps put the dollar in the digital world. It helps give people, who have bad currencies in some counties, digital dollars, and it creates new demand for our debt. So, I think there are a lot of good, interesting and exciting use cases for blockchain and for Web3, stablecoins are one of them and I think it actually helps solve some of our fiscal problems as well.”