By: AIF Staff

Los Angeles, CA – This week, at the 28^th annual Milken Institute’s Global Conference, AIF President and former Speaker of the House Paul Ryan joined a panel of experts to discuss America’s federal budget and potential solutions to our growing national debt. 

Joined on stage by Alan Schwartz of Guggenheim Partners, former Treasury Secretary Steven Mnuchin, Congressional Budget Office Director Phillip Swagel, Committee for a Responsible Budget President Maya MacGuineas, and moderator Josh Barro, Ryan shared his thoughts on the reconciliation bill being debated by Congress, how to prospectively reform and strengthen entitlement programs, and ways to jump-start economic growth. 

To view the entire Milken Institute panel discussion, entitled: Balance Sheet: US Government and the National Debt, click here. Excerpts of Ryan’s remarks follow.

As mandatory spending drives the debt, discretionary spending drives debate on the Hill 

“Domestic discretionary spending — there’s an appetite to cut that. I think the budget that came out yesterday proposes a 22.6% cut to that, but that’s about it. 

If you look at the current reconciliation bill, it has spending in it. It has $300 billion in spending for the Department of Defense and for immigration and border security. The $880 billion that the Energy and Commerce Committee is trying to get out of Medicaid, we’ll see. They are having a hard time putting the votes together for that. 

This Congress isn’t what we used to be. I don’t think either of the two political parties have any real appetite for entitlement reform, which is where the money is. When you’re looking at three quarters of the budget, which is mandatory spending, putting your interest payments aside, it’s the mandatory entitlement programs that are driving this debt and both parties have, more or less, been taken over by populism which takes a stand against doing something about that. 

It wasn’t too long ago that we would make these proposals and pass these bills, but that is just not where we are. I just do not see an appetite in Congress or in the White House today to go after the big driver of our debt, which is mandatory spending.”

Congress is backsliding when it comes to fiscal discipline

“What’s frustrating, as a recovering politician, is we were more serious before, and we have relapsed in our seriousness of dealing with this. What’s frustrating about this is all of these problems are within our control as a country. We see this coming. We know what we need to do. We could fix this – but we won’t or we are not, and it’s because our political situation has deteriorated. 

To give you a sense of this, before I was Speaker and Ways and Means Chair, I was Chairman of the Budget Committee. Ten years ago, I passed a budget off the House floor with 231 votes that cut $6.4 trillion out of the baseline. We raised the retirement age. We means tested Medicare. We block-granted Medicaid. We did food stamps with able-bodied work requirements. If you took that budget on today’s baseline, we would be cutting $11.6 trillion out of the baseline. Ten years ago, we had the votes for that. Ten years ago, we passed that off the House floor. 

They will be lucky if they can get $2 trillion in this reconciliation bill out of this baseline, and by the way, that won’t be a net of $2 trillion, because of the $300 billion in new spending, so it’ll be $1.7 trillion if you’re lucky. We have deteriorated in our ability to take these things on, and that’s what is so frustrating about this. This is the most predictable crisis we’ve ever seen in our country.  

We know Treasury auctions may fail, we just don’t know when, and we know what the Federal Reserve will do when that happens…. And we could avoid this, but it doesn’t look like we’re going to, and that’s what is so frustrating about all of this.” 

Prospective reforms and private sector know-how can extend entitlement programs’ solvency

“We have learned a lot about how to run retirement and healthcare systems since we started these programs in 1932 and 1965, so there’s a lot more we know. In Medicare’s example, the Federal Employee Health Benefit System is a very popular system that works well and that has far lower costs increases than current Medicare. 

We have roadmaps on what to emulate to bring good reforms and for the scorekeepers, if you do something like that, you’re effectively taking a program that is a defined-benefit, open-ended program and putting a fixed growth rate on it and basically turning it into a defined-contribution program and then, underneath that, you’re doing things like you described like raising the retirement age, means-testing the benefit, subsidizing a person’s premium based on health and wealth. That model works. It scores pretty well.  It gets you out of the woods, but it is a combination of newer things that we’ve learned in society about how better to run these programs using private sector choice and competition along with those “austere” screw-turning things. 

The good thing about all of this is that if we step ahead of this, we don’t have to [make benefit changes] to current seniors. It can be prospective, so anyone who is in or near retirement today, this won’t apply to them. It will be for tomorrow’s retirees — let’s just say 60 and below, so you have a little time to prepare and so politically, you can survive because you’re not taking benefits away from current seniors. If we wait until we get into a really bad situation, we might not be able to do that. If we’re doing urgent budget surgery to dodge the vigilantes in the bond markets, we might not be able to do that.”  

Bipartisan fiscal commission “with teeth” is the likely path forward

“I think the only game in town right now is a fiscal commission with teeth. 

I was on Bowles-Simpson. Bowles-Simpson was literally dead before we left the room in the last meeting because the President of the United States and the Speaker of the House at the time put out press releases saying we’re not doing it. And therefore, they didn’t. 

So, [we need] a fiscal commission with teeth, like the Greenspan 1984 Commission on Social Security, that requires Congress to vote on it, not amend it, not filibuster it. Maybe a President in the second-half of his last term looking for a legacy to save the dollar and dodge a debt crisis, could do that. 

But to Steve’s point, it has to be bipartisan and the lynchpin is a debt limit deal or fiscal deal where you have a tight Congress and that is the price of getting that package passed – which is requiring a statutory commission, to bring to Congress something like that.” 

Stablecoin legislation will strengthen America’s fiscal standing globally

“On the good news front, I think Congress is going to pass the stablecoin legislation this Summer and that is going to help spread the dollar more widely across the world. I think it’s going to digitize the dollar and buttress the dollar as the world’s reserve currency, so I think we have good news coming on the dollar front.” 

Political obstacles and demagoguery limit potential for solutions

“We are never going to cut benefits for current seniors. We are going to make changes for the next generation so we can cash-flow the program for current seniors and save the program from insolvency and bankruptcy. But what politicians say is: “If I do that and raise the retirement age in ten years or taper the benefit formula for future generations, the ad run against me will be, “I’m cutting benefits for current seniors.” Everyone will get confused and I’m going to lose.” That’s basically the political calculation and that’s the problem. And that is why these things will have to be bipartisan…”

“The problem for Republicans and conservatives is the Democrats want the revenue, but they won’t give us the spending cuts. We’re not just going to give you more revenue to feed this unsustainable spending trajectory. The only way a deal like this ever works is if you have them paired together where you know you are getting real spending cuts and when you know you’re getting real, actual spending changes to the baseline and then, and only then, are conservatives willing to entertain this.”  

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By: AIF Staff

Washington, DC – Last week, at Georgetown University’s McCourt School of Public Policy, former Speaker of the House and American Idea Foundation (AIF) President Paul Ryan talked with students, young professionals, and the Georgetown University community about fiscal policy and how America’s out-of-control national debt is imperiling economic growth.

In an hour-long discussion facilitated by AIF Board Member Jonathan Burks, who serves as the Executive Vice President for Economic & Health Policy at the Bipartisan Policy Center, Ryan detailed the drivers America’s growing debt, touched on how elected officials can address our short and long-term economic challenges, and why doing so matters to current and future generations of workers and retirees. He also imparted some wisdom for Georgetown students pursuing a vocation in public policy.

To watch A Conversation on Fiscal Policy with Paul Ryan, click here. Excerpts of the discussion follow below and a recap from the GU Hoya is accessible here.

Ryan: Political courage & 21^st technology can help save America’s social contract

“ We, as Americans and as Republicans and Democrats, basically agree with the social contract. We want to have it in America. We have had a lot of litigation on this over the years and have debated the Great Society, the New Deal, Obamacare, etc. We have settled on a consensus in both parties that this social contract, which I describe as health and retirement security and a safety net for the poor, is what it is. We basically agree it is something that government should

do. Where we will disagree is how the government executes this social contract. We will disagree in some instances on whether it should be administered by the state or federal government, but that government should do this is not in dispute.

The problem is that we have programs designed in the 20^th century that are structured in a way that is proving unsustainable in the 21^st century and they are driving us into a debt crisis where the programs themselves will be unraveled and disintegrate and go bankrupt. And we will renege on these promises if we do not get ahead of it and fix these problems.

The good news is, since we started in 1932 with Social Security and with Medicare in the 1960’s, we have learned a lot about how to better run social insurance, retirement, and health care problems. The problem is that we have not applied [these lessons] because of unserious politics.

It’s not for a lack of trying, because some of us have tried to do this, but it has become politically taboo. It is counter to populism.

It is counter to some ideologies to try and do anything that may affect these programs. If you do, you will run into a wave of political attacks that will make those on the program think that their benefits are being taken away. Never mind the fact that you can reform these programs in a way that does not affect people in or near retirement who are using those benefits.

The mere act of trying to reform the social contract in any way, even to make them better, is so politically difficult that it is not done, so we’re walking into a debt crisis.”

Aspiring policymakers: End the era of “Instagram policymaking” & “buy the dip” on policy entrepreneurship

“If you look at the landscape in Congress, this is Kabuki theater. It’s nothing but populism and owning the libs. It’s Instagram policymaking. This moment we’re in, we have more entertainers and legislators in the legislature than ever before, but you have to look at the trends that are coming. This is not sustainable.

This vacuous populism, this entertainment-like quality of our policymaking is not sustainable and what is going to be needed are people who are policymakers. What’s going to be needed are people who care about policy, who have deeply held principles that they want to advocate for and apply these to our problems.

The country will need this soon, frankly, so it is a good time to get into this industry. It is a good time to be an aspiring policymaker, whether you want to run for office or serve in a staff capacity.

It is like buying the dip. The dip, right now, is that we are intellectually less rigorous than we ought to be in policymaking, so we’re in the dip. Buy the dip and become policymakers so that when you come out of Georgetown, you will be running the country in a few years because we need smart, policy-minded people to do that.”

Applying Catholic Social Teaching to public life

“If you look at the body of documents that the Catholic Church has produced on the way that lay Catholics are supposed to operate and conduct themselves in public and private life, it gives you this beautiful mosaic. It gives this beautiful philosophy of getting involved and making your community better.

We have this principle that we call subsidiarity, effectively making a difference where you are. It means the closer you are to the problem, the better you can solve it and people coming together to do that is good for society.

We have another principle, in conjunction with that, which is solidary, meaning we’re all in this together. It means we want to make the world better not just for ourselves but for other people.

To do this, we use prudential judgement. There is a nun, Sister Simone, that used to protest me with Nuns on the Bus. She was a real left-winger and I’m a conservative and we are both Catholics. We do not agree with each other in how to apply prudential judgement, but there is lots of room for discretion to have differences of opinion on how to achieve those goals…. Catholic Social Teaching really accommodates that and to me, it is a great roadmap of how to conduct yourself in public life. I fell short of this all the time, but it gives you an aspiration to achieve.”

Time is of the essence to save entitlement programs

“I worry we’re getting close to missing the window…. We are going from 40 million retirees to 77 million retirees in one generation with a drop in birth rates behind them.

What happens is, if you reform these programs for at least those 55 and below, you can give us a new system, which is more of a defined contribution system where you can quantify the rate of these entitlement programs on an accrual basis, [and in doing so] you are forwarding tens of trillions in debt reduction. I would strongly argue the bond markets – and all bond traders say this – will give you credit for that.

So today, if we passed: 1) Legislation that says people who are 55 and below will have a Social Security system that has means-testing, that gradually increases the retirement age, and a few other things; 2) on Medicare, if you go to a means-tested, premium support system, which I think is the best way to go; And 3) Medicaid becomes a per-capita block grant where you send money back to the states based on their population with a growth cap on it.

Those three things, right there, will save you from a debt crisis….

If you do that, the bond markets will say: ‘Because you passed a law that says starting in 10 years, you are changing the trajectory of spending from here to here, I will give you credit for all that savings now and let you, America, borrow for those baby boomers at these cheap interest rates because we see that once the Baby Boomers cycle off, you are back down to a debt to GDP ratio that is totally workable’…

If we go into a tariff-driven recession, it pulls forward these numbers and gives us a step function increase in the deterioration of America’s balance sheet and that could bring auction failures, a debt crisis, and all that horrible stuff.”

Ryan: Examples of using data to break stalemates on fighting poverty

“[MIECHV] is a program where we would send nurses to lower income, expecting mothers who had no experience in pre-natal or post-natal care. The government ran a randomized controlled trial on it and collected a lot of data on it during the Bush Administration, and it was really

successful.

So, George W. Bush founded it, President Obama doubled it, and Donald Trump kept it. Why? Those are three very different people – just take my word it – but the evidence was clear that this works.

We take this approach with 1% of all federal poverty fighting programs. That’s it. So, Patty Murray and I created this Commission with that purpose – to release this data so that economists can look at it and measure what works and what doesn’t. We passed the Commission’s findings and recommendations into a law called the Evidence Act, which is being rolled out across the federal government.

The thinking here was let’s get past our party and our ideology. We want people out of poverty. We want to get at the root causes of poverty to break the cycle of poverty. So let’s do what works! That is hopefully where we can go to leapfrog this partisan stalemate we have had.”

Reforming the social safety net to always promote upward mobility:

“My foundation, and Jonathan is on the board of that, we look at programs that we think have promise to see how well they do and if they do well, we want to franchise, scale, and replicate them around the country. We evaluate these programs in conjunction with Notre Dame economists, and the point I’m trying to make is we should have a strong emphasis on helping the poor in this country….

We want upward mobility. We are working on digitizing the social safety net to build a digital wallet for the poor so they can have their safety net built into it with programmable benefits and with algorithms that smooth out the benefit cliffs, so you don’t block upward mobility.

One of my frustrations is that we have these 20^th-century welfare benefits that are well-intended, but our poverty rates are the same. We have had the same poverty rates since we started the War on Poverty 50 years ago and we are at trillions of dollars spent on it.

If we measure in the War on Poverty by throwing money at the problem and creating new programs, rather than measuring whether people are actually getting out of poverty, we are not doing it the right way. We need to focus on outcomes, not inputs…

The problem, in a nutshell, is in the 20^th century, we took a cookie-cuter approach to these programs. We treated all people the same. A single mom, with two kids, has a job. Let’s say, she takes a second job. She will calculate in her mind, rationally, that if I take this job, I am going to lose my childcare benefits because of the program’s benefit cutoffs. She will say: I am not going to pursue that raise because I will lose more than I gain by taking this risk, working longer hours, and being away from my kids. You don’t want the safety net to force people into those kinds of decisions.

In the 20^th century, there was not a lot we could do about it. Now, with blockchain technology and digitization, we can fix this with an algorithmically smoothed program so when that woman gets that raise, her benefits are reduced by less than that amount. It should always pay to take that step, to take that raise. We can say: You will only lose some of your childcare benefits if you take this raise, not 100%…

The point I’m trying to make is we should focus on poverty and upward mobility, but if we think about redistribution of income through the tax code, we will kill the Golden Goose, which is a growing economy.

So let’s fix these problems in a 21^st century way with good technology that has smart economics and build a safety net wired for upward mobility.”

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By : AIF Staff

Washington, DC – Yesterday, former Speaker of the House and American Idea Foundation President Paul Ryan was a keynote speaker at Axios’ What’s Next Summit, an annual event featuring leaders from government, health care, technology, and philanthropy. At the Summit, which focused on the policies and issues that will dominate discussions throughout 2025, Ryan was interviewed by Axios’ Economics Reporter Courtenay Brown about the major economic debates ongoing in Congress.

To watch the entirety of Speaker Ryan’s session at Axios’ What’s Next Summit, click here. Excerpts of Ryan’s interview are included below.

Video: Ryan: CEOs are optimistic but concerned about tariffs

“Uncertainty is what business leaders don’t like. Teneo just did a survey of 700 CEOs representing $10 trillion in market cap. They do this survey every year and from last year to this year, there was a 32-point swing upwards in optimism, but the one sort of dark spot in it was tariff uncertainty. The survey was done in December and now, tariff anxiety has a higher premium and it has created a little more uncertainty.

Business leaders want to plan, and they want to make sure that the bets they are going to make are going to pay off. If there is a bunch of policy uncertainty, that makes it a little more difficult to predict and that is basically the key story that I hear from CEOs.”

Video: Ryan on the 2025 policy landscape: “Tax and regulatory certainty are coming.”

“If I look at the policy arc right now, I see good things coming. I see good growth levers. I think they’re going to pass the tax bill, and I obviously am for doing that.

I think good tax certainty is coming, once they get that bill passed. Until they get that bill passed, it’s uncertain. We have a one vote margin in the House.

The regulatory certainty – deregulation and a better regulatory footprint– everyone believes it’s coming, but it takes time [because of] the Administrative Procedures Act and putting people in jobs.

The pro-growth stuff that people think is coming and that CEOs tell us in surveys that they think is coming  is sort of in the second half of the year. The uncertain stuff is right now – that’s the tariffs. So, you have the uncertain stuff now and the pro-growth stuff later in 2025, which means it’s a mixed message.”

Video: Ryan details timeline for tax reform & why extending TCJA is essential for growth

“I think they’ll get it passed but with these narrow majorities, you can never take it for granted.

Getting it done by Memorial Day is a really ambitious timeline and I’d be surprised if they meet that deadline. It’s more likely that it will be the end of summer. August recess is a great way to back up legislation as it provides a really, nice deadline. I would realistically shoot for that…. 

But if you let the TCJA expire, the sub-chapter S corporations, the pass throughs, the LLCs – like 65% of our businesses –  will have an average tax rate of 23% to 28% that will go to 44% or maybe even 46.8% That is a huge tax increase on employers and it makes them extremely uncompetitive globally speaking. You have to remember, we’re in a global economy, whether we like it or not, and if we tax our employers a whole lot more than our foreign competitors’ tax theirs, that’s not making us competitive and we’re going to lose jobs. So, it’s really important that they pass this tax reform.

Deficits notwithstanding, you need growth and if you want to get ahead of our debt problems, you have to have your nominal GDP growing at a reasonable rate, especially ahead of your debt-servicing costs. You have got to work on spending — and that has got to be done, but you have to have growth. And if you smack your economy with a huge tax increase because this expires, you’re not going to have growth in my opinion.”

Video: Ryan: “Love the promise of DOGE”

“I love the promise of DOGE but for it to last and be real, you have to get it through Congress…

My hope for DOGE is they digitize government’s payment rails, bring Silicon Valley economics to the defense procurement process, and streamline government using the technology they are familiar with. But to do that, you need to go to the authorizing Committees in Congress, pass those bills, appropriate the money, and that means it has to be bipartisan. I don’t think Chuck Schumer is looking to help them…

I love the idea, but to make it last more than one term, you have to get it into law and that takes 60 votes.”

Ryan on the April 2^nd tariff deadline

“I hope on April 2^nd, we will see more of a comprehensive world view instead of this on/off, this tariff or that tariff. I think that’s in the offing…. But President Trump is sincere in his belief on these things. He really believes in these [protectionist] policies and believes they will make a positive difference. I just have a different view on that.

When I studied economics growing up in the 1990’s and 1980’s, free trade was a good thing. Pax Americana was good for everyone — for the world and for America. I think there’s a view now that it wasn’t good for America, like it was for the rest of the world. I don’t share that view, but that’s the consensus view right now.”

Video: On leading in Congress & Senator Schumer’s navigating a possible government shutdown

“I am probably hurting [Chuck Schumer] by saying this, but he did the right thing. He made the smart move for his party. He really did.

You always do that as a leader. You are a heatshield for your members. You take the bullets so that your members can survive. That’s what Chuck Schumer just did.

He was a heatshield for his party and for his members. Otherwise, he would have walked his party into a ditch and they would have had a government shutdown. The last time they did this; it was called the “Schumer Shutdown.” I was Speaker at the time. It wasn’t a good look, and Democrats pulled out of it. Whoever starts the shutdown, they lose the exchange.

To be a good leader, you have to be a heatshield for your members. You have to get consensus with your members and get them to buy into a plan and then go execute the plan. And Chuck, I am sure he has a plan… But as a leader, you take the tough votes. You make the tough decisions. You take the flack. You’re not that popular when you’re a leader.”

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