The American Spectator

House budget chief Paul Ryan restated that the Republican Party intends to produce a budget that “shows real leadership on entitlement reform” this morning at a press breakfast hosted by The American Spectator and Americans for Tax Reform. Criticizing President Obama as “deeply unserious” about fiscal reform, Ryan characterized the difference between Republicans’ and Democrats’ ideas of fiscal policy as a difference in vision about the role of the government, with the Democrats pursuing a version of European-style social democracy. 

Ryan warned that, fiscally, the U.S. is headed “off a cliff,” and suggested that there was “not a lot of time” before the bond markets begin to assert a limit to the debt that the government can issue. Although Ryan stated that all government spending, including the defense budget, needs to be reduced, he argued in great detail that health care spending is the key threat to the government’s solvency. 

“Unless you can convincingly tackle the the root cause of health inflation you’re not going to get this turned around,” Ryan said. He argued for a more free-market system of health care, saying that he wants “300 million consumers” of health care services. “When you have consumer pressure, when you have transpency on price and quality, and a consumer incentive to act on those things, — voilà: better quality, lower prices.” Ryan identified a lack of consumer-based spending as the fatal flaw of Obamacare, and criticized Romneycare for the same reason.

Ryan got deep into the policy weeds in defending the Republicans’ attempts to cut spending immediately. He criticized recent studies by Goldman Sachs economists and Mark Zandi of Moody’s Analytics that claimed that Republicans’ budget cuts would lead to sizable job losses, saying that the reports contained “bogus mulitipliers” for government spending. He specifically cited the work of economists John Taylor of Stanford and Robert Barro of Harvard in making the case for budget cuts.