Ryan: Political reality weighs on fiscal hopes

Rep. Paul Ryan (R-Wis.) struck a tempered tone Thursday when it came to tackling big fiscal issues, warning that the current political makeup makes big initiatives unlikely.

The House Budget Committee chairman, widely seen as a front-runner to take over the tax-writing Ways and Means Committee, said it was critical for the U.S. economy to take on major fiscal projects like reforming entitlement programs and overhauling the tax code. But actually getting those things done is another matter.

{mosads}“We would like to do tax reform, we would like to have a budget agreement that gets entitlement programs under control,” he said. “We don’t know how much progress we’ll make on those issues.

“Tax reform’s one of those things where we just don’t know if we can get there at the end of the day,” he added.

Ryan made those comments at an event hosted by the Financial Service Roundtable, a major Wall Street industry group.

An undercurrent of his message to the group is that if they want to see progress on big-ticket items like tax reform, they should back Republican control of Congress and, eventually, the White House.

Ryan said he did not like the direction the country was headed, and said he was eager to mount an alternative policy case to prescriptions from President Obama and his administration. And he added that expanding GOP control would make it easier to accomplish some of those goals.

For example, Ryan said if Republicans take control of the Senate, they will be able to calculate the price tag of legislation differently. Republicans have long pushed for the Congressional Budget Office to use “dynamic scoring” when calculating the costs of legislation. Currently, the CBO scores legislation using static scoring, which does not take into account how behavioral changes brought on by legislation could in turn alter how much a particular provision costs.

But Ryan and Republicans argue that adopting a new scoring method would make it easier to adopt revenue-neutral policies, and also paint a more accurate picture. If the GOP controlled Congress, they could change the calculation methods employed by the CBO.

“The scorekeeping we use is not correct,” he said.

Rep. Dave Camp (R-Mich.), the current Ways and Means Chairman, unveiled a revenue-neutral tax reform proposal under current scoring rules that was not warmly embraced by members of his party, as it had to trim a host of preferred tax breaks and establish a few new taxes to even the tally.

Ryan said the current scoring method “handcuffed” Camp’s efforts, and suggested he did not want to operate under similar restrictions if he took on tax reform as a goal.