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E21/Manhattan Institute's Conversation with Rep. Paul Ryan

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January 06, 2011 | comments

Video: A Conversation with ... Rep Paul Ryan from Economics 21.

A full transcript of the e21/Manhattan Institute event "A Conversation with ... Rep. Paul Ryan." e21 Board Member Bill Kristol introduces Wall Street Journal Editorial Page Editor Paul Gigot and Rep. Paul Ryan, Chairman of the House Budget Committee.

KRISTOL: Let me ask you to take your seats and I'll do a two-minute introduction and turn it over to the two -- the two Pauls from Wisconsin.

The first half of this session will be on the Packers' prospects on Saturday and Wisconsin's unfortunate defeat last culminating a big weekend for the Big Ten. I believe they lost five games out of five, but at least Wisconsin made it competitive. Anyway, I'll let them do that.

I'm Bill Kristol. I edit the Weekly Standard. But I'm here just because I'm on the Board of both the sponsor organizations of this excellent event, which I'm looking forward to.

One of the sponsors in the Manhattan Institute. I'm a relatively inactive and useless board member of that fine institution. And I'm also a relatively inactive board member of e21, the other sponsoring institution, so I get to do the introduction here and leave -- listen I should say. Of course, listen attentively.

Manhattan Institute, you all know, is a very fine think tank in New York. It puts out its magazine, City Journal. Was probably best known for its contribution to the policy ideas that Mayor Giuliani implemented in the '90s, and many other mayors since, and governors, took the lead on in the '90s.

I'd say in the last two or three years, perhaps a little less well-known, Manhattan Institute has done terrific work, people there, on the state pension crisis, people like E. J. McMahon and others; and also on the fiscal crisis, actually, the financial crisis, Nicole Gelinas and others.

So Manhattan Institute is happy to be a co-sponsor of this event, as is e21, a smaller and younger think tank just about a year and a half old, dedicated to innovative public policy ideas for the 21st century in economic policy.

Both websites I should say are really worth going to each morning, and you can even sign up and get an e-mail from them to save yourself having to go find them each morning. Manhattan Institute, you can search for their website. It's well known. And e21's website, I believe, is economics21.org.

So I highly -- I honestly recommend that to keep up on the economic policy debate, both at the state level and the federal level, the budget debate, fiscal policy, monetary policy. Really worth -- both are worthwhile.

On behalf of both organizations, we're really pleased we're going to have a series of conversations with major public figures in which the conversation will be moderated by, led by another major public figure. This is really a terrific one. We're going to have Mitch Daniels, I believe, in about a month, and other governors and senators actually and other political leaders have consented to do this.

It's really terrific to kick it off, though, with Paul Gigot and Paul Ryan, the Pauls from Wisconsin. Neither needs any introduction.

Paul Gigot wrote, in my opinion the best, column written in Washington for the years he did it from 1988 to 2001 in the Wall Street Journal. And then went to New York to assume the editorship of the Editorial Page of the Journal where he is doing an excellent job, and of course that's must reading.

Paul Ryan came to Washington in 1998 as a seven-year-old. He came as a young, very young, what 28-year-old I suppose, member of Congress. It's hard to believe he's entering -- just entered, I guess, congratulations, his seventh term has a Republican member of the House from Wisconsin. Now chairman of the Budget Committee, obviously a crucial position to have. He was already crucial for his intellectual leadership, but now crucial institutionally as well in terms of what happens over the next few years in fiscal and budgetary policy.

So I will turn it over to Paul Gigot and Paul Ryan. Thank you all for coming.

GIGOT: It's a great pleasure for me to be here. Thank you all for coming. It's a pleasure to be here with Congressman Ryan. So let's just -- the plan today is the two of us will talk for about 40 minutes and then we'll open up to all of you for questions later on.

So let me start by -- before we get into some of the details of the budget year and the debate, let me ask you to think ahead two years to 2012 when...

RYAN: Packers will have their second Super Bowl ring by then.

GIGOT: You're more optimistic than I am. But so -- but you're running for reelection. You want to present to the voters what you've accomplished. Thinking ahead, what is it that you want to be able to tell the voters that you -- show the voters that you have done in these two years?

RYAN: That's probably the most important question right there. What I hope we will have done is we will have been responsible, we will have conducted ourselves with humility, we will have worked with President Obama on occasion where we can find some common ground on some issues to get things done for the country.

But at the end of the day in 2012 I think there are just large chasms of difference of opinions of governing philosophies that won't be bridged. And so I feel we owe it to the country to give them a choice, an alternative future for the country. And so by 2012, hopefully Americans will have in front of them a very clear choice to make, a choice of two futures.

On the one hand would be the future that we have in front of us right now. Based upon the current trajectory that we're on, based upon all the government that had been created in the last two years, and everything preceding that from -- from both political parties, which is putting us on a path of debt ruin; which is putting us on a path of becoming really more like a European democracy, a social welfare state. That's the path we're on today.

Hopefully we will give the country a choice of a different future, one where we reclaim the American idea; where we embrace American exceptionalism, where we reject this future of managed decline, and we reapply those principles that founded this country, and we show the country the future of a debt-free nation, of a nation with a prosperous growing economy an opportunities society with a safety net versus a cradle to grave welfare state. And give the country that choice.

And I believe, for one, that we would win that referendum, and therefore have the moral authority, and therefore the opportunity in 2013 to make good on that vision, to reapply these -- these principles and fix these things.

I also think that it's important that they see us as the party of growth and opportunity, not the party of Crony capitalism, which we have fallen into that trap before.

GIGOT: As Republicans.

RYAN: As Republicans, yes. And both parties do this. That we believe in being pro market, not necessarily pro business, and there is a distinction that every Republican in Congress needs to learn.

And so what we believe in is a system and a society where everybody has a chance to make the most of their lives, and that we have the prosperous, growing, internationally competitive economy where people can have a bright future.

We know for an irrefutable fact, CBO tells us this over and over, we're giving the next generation an inferior standard of living. Living standards are going down in America based on the future we have right now.

We've created two new open-ended entitlements on top of the other ones we have. We owe it to the country to show them a different path, one that will give the next generation higher living standards. And that's what I hope we can present by then.

GIGOT: I think it's interesting that in your answer you didn't mention any specific legislative achievements necessarily.

RYAN: Well...

GIGOT: You suggested that the main goal is to present a choice. Do you think -- do you -- as you look at two years from now, do you think that there's anything legislatively that you really want to have done?

RYAN: So, I think in order for that, what I just said, to take place, we have to define ourselves with our actions. So we will have to draft and pass legislation through the House to frame that choice.

Accomplishments we want to have by then, it's difficult to answer that question because not knowing what the president's going to be willing to sign into law or not, it's tough to say. So that's why I started out saying I hope there are some things.

The way I hope this goes is the president and I -- I think triangulation or whatever you want to call it is a foregone conclusion. He's going to come to the middle because he has to come to the middle to get things done to work with House Republicans. And so hopefully he'll say to us on a, b and c I agree with you, Republicans, let's do those things. Trade some other things, some spending reforms and then we'll do those things.

But on x, y and z, repeal of his health care law and replacement with a consumer directed...

GIGOT: You don't expect that...

RYAN: I don't think he's going to work with us on this.

GIGOT: Right.

RYAN: And so we will still advance legislation doing these x, y and z things so that at the end of this two-year period in 2012 the voters of this country, the people of this country have a real clear choice. And that's what we owe them.

GIGOT: But you have to pass a budget.

RYAN: Mm-hmm.

GIGOT: And you have to take care of the rest of fiscal 2011.

RYAN: '11, right.

GIGOT: And then you have to pass a budget resolution for 2012. You're taking over the budget committee with a spending as a share of GDP by 25 percent this year.

RYAN: That's right.

GIGOT: The deficit is what, 10 percent, roughly. And the deficit itself is about $1.2 trillion. Do you have any numerical targets of where you want to take those three, for example, at the end of two years where you can say this is actually tangible progress that we succeeded in?

RYAN: I will when we get our new baseline. I don't mean to be evasive, but we don't get our numbers from CBO. The first paunch of numbers come at the end of this month.

GIGOT: Right.

RYAN: And the president submits his budget, which is going to be a week or so later. I think February 14th I think is when it's coming. That delays us. And then we get another set of numbers from CBO in March probably. That is then when we see where we are and what kind of deficit targets we can hit.

So yes, I expect in the spring, probably in April, that's when the deadline usually is hit. In April we will have a budget resolution which will map out how we would do things differently, what's our fiscal prescription for the future of this country. Containing and controlling, cutting spending, but also growing the economy, you know, doing pro-growth economic reforms to get opportunity, prosperity and jobs back in this economy.

Those are the things we're going to be putting out in our budget resolution. The technical part of the budget resolution that's obviously necessary that you mentioned is FY 2012 discretionary spending.

GIGOT: Right.

RYAN: That's where all these sort of government shutdown scenario talk come into play. We're going to have a really low number. It's probably going to a lower number than what the president has.

GIGOT: Do they?

RYAN: I think so. And then over the course of the summer and into the fall we'll have to negotiate, just like we have to in March. We'll have to negotiate a resulting number that comes out of that for discretionary spending to continue.

GIGOT: So first of all you've got to deal with fiscal 2011.

RYAN: Right.

GIGOT: There's already a lot of talk in the press. You probably heard some Democrats criticize you for backtracking on the promise...

RYAN: Yes.

GIGOT: ...campaign promise of $100 billion reduction. Can you respond to that charge that you're already backtracking?

RYAN: If -- if people think we're afraid of cutting $100 billion, they've got another think coming. This is just the beginning. What this...

GIGOT: You're going to meet that target?

RYAN: What this is, is when we put out our target, which was bring spending down to '08 levels...

GIGOT: Right.

RYAN: In October when we put that out there, that scored at $100 billion. What happened since then? Well, a CR occurred, which came down below the president's number. That -- continuing resolutions, sorry. I get a little -- continuing resolutions.

GIGOT: And that runs through March.

RYAN: That runs through March; and so two things have happened since then. The CR itself brought spending down, and half the fiscal year spending is already gone and out the window.

So hitting the spending target that we pledged to hit in our Pledge to America now scores at around $60 billion, not $100 billion. So they -- so the savings estimate of our policy in October was $100 billion. Now it's not $100 billion because half the money's already out the door because of this CR.

So it's not a backtrack of policy. The Republican policies stay the same. It's the savings estimate of the Republican policy has changed.

GIGOT: So from your point of view is it fair to say the $100 billion still, or the 60 or 100, that's just a down payment? You're -- you're -- you're going...

RYAN: It's just a down payment.

GIGOT: You're going...

RYAN: Wait until we do our budget resolution. Wait until we do our fiscal year 2012 spending bills. We're going to keep going.

GIGOT: OK. You mentioned discretionary accounts; you think you can get a lot out of that. Does that include defense and national security?

RYAN: Yes. The way I personally look at these things is let's lower the caps and have it quite underneath the caps.

GIGOT: So...

RYAN: You can't throw $700 billion at a government agency and not expect waste to be -- waste to occur.

GIGOT: So you would reduce the cap on different departments, including defense?

RYAN: I would reduce the entire discretionary cap. We call this the 302(a).

GIGOT: And then defense fights with education. Defense fights...

RYAN: And we prioritize. And like I try to do is I don't try to do the job of the Appropriations Committee. They're pretty guarded about their jurisdiction.

So, the way I look at defense spending is number one, let me -- let me say something that's probably counter to what you thought I was going to say. Everybody wants to have a peace dividends budget, but we're not at peace. We can't have a peace dividend budget when we're at two wars.

Number two, there is waste at the Pentagon. We have to go after that waste. We have to save money in the DOD budget.

GIGOT: Do you have any specific examples?

RYAN: O&M accounts, operation and maintenance accounts. There's lots of waste in operations accounts.

GIGOT: Any procurement?

RYAN: That's what I mean when I -- procurement as well. O&M and procurement.

GIGOT: Any particular programs you have in mind?

RYAN: I'll let the appropriators answer that question. I do have opinions, but I -- I'll keep to myself right now.

What I would like to do is go after that waste in the Pentagon, get savings in the Pentagon, and then re-plow that back into higher priority defense spending to prevent us from having to do all these supplementals. What we typically do is we pass a defense appropriations bill, and then we pass a hundred plus billion dollar supplemental on top as if it's an emergency that we don't know we're in Afghanistan.

So I would rather see savings occur from within the Pentagon budget by cleaning up the books at the Pentagon and then plowing that back into the Pentagon to reduce the need to have these supplementals which occur outside of the budget and on top. That to me is the better way to go.

But when it comes to the Treasury it's going to bring the entire cap down and -- and force government to prioritize within. And when you're prioritizing, let's recognize the fact that we can't have a peace dividend budget in a time when we're not at peace.

GIGOT: What kind of magnitudes are you talking? Or is the 2008 target still...

RYAN: Well, that's where we are for 2011. So we're going down to 2008. That's at 2011.

GIGOT: That's 2012 you're talking about even lower.

RYAN: Yes, I am talking about -- I'm talking about more savings coming in the budget. It's tough to -- I can't give you a number because I don't have my yardstick. I don't have a CBO baseline to give you a number yet. But we are going to continue airing back spending after this current fiscal year expires.

GIGOT: OK. Now the -- the other question, big question if you're going to reduce spending of the entitlement accounts, Medicare, Medicaid, Social Security predominantly. Are you going to include those and reductions in those, reform in those as part of your budget resolution?

RYAN: So, I don't know the answer to that question. I literally do not know the answer to that question.

GIGOT: If you had your druthers.

RYAN: My roadmap is what my answer to my preferences are. What everybody seems to think these days is, well gosh, I'm the chairman now and I can just make my roadmap the budget resolution. That's not how it works.

I wrote the roadmap in 2008 and 2010 to reach the consensus of one person, myself. I now have to write a budget resolution to reach the consensus of at least 218 people, the majority of the Republican Caucus.

So it's difficult to say what that's going to be, especially since I don't have our baseline yet. But we cannot ignore entitlements. We have to deal with entitlements. And what we're going to do, I just came from a meeting in Ways and Means. We're launching lots of hearings on entitlement policy in Ways and Means. We do lots of hearing in Budget Committee on -- on entitlements. Commerce Committee's going to do hearings on entitlement reform. We're going to bring governors up to tell us about their reforms that they've done. We're going to look at Medicaid solutions. We're going to look at all parts of the federal budget. Nothing is going to be immune from oversight and from hearings so that we can go out and get the best ideas to try and figure out how to get those things turned around. But ultimately you can't fix or preempt a debt crisis....

GIGOT: Right.

RYAN: ...without dealing with entitlements. And we have to -- we have to take some sizable steps in that direction.

GIGOT: So you're argument inside the Republican Conference will be we must do something about Medicaid, Medicare and Social Security in this two-year timeframe, despite the fact that the president as a Democrat and the Senate...

RYAN: I look at those -- I wouldn't lump the three of those in the same sentence. For instance in the Debt Commission, which I serve as a member of, Social Security reform should not be a function of deficit reduction or debt reduction.

Social Security reform in and of itself should be to fix and reform Social Security. Whether or not we do Social Security reform, I don't know the answer to that. I would love to see if the president wants to engage in a dialogue on that...

GIGOT: Well, let's say he doesn't. Would you...

RYAN: Let's say if he doesn't, I don't know the answer to that question.

GIGOT: Would you recommend it to your conference?

RYAN: I put the last budget I wrote, which was in a minority, I put some modest Social Security reforms in there. I took the Osrzag plan that he wrote when he was at Brookings and put some of his things in.

We did block running Medicaid to the states in our last budget.

GIGOT: Would you like to see that...

RYAN: We did -- yes I would. I think block running Medicaid to the states is one of the policy options we should consider given the facts that states are so different from one another. It's crushing state budgets. It's leading to state insolvency and attributing to their fiscal problems.

GIGOT: What do you think the prospects of that are, of that happening is? Because that's...

RYAN: Of all the...


GIGOT: ...a little less toxic...


RYAN: ...entitlement reforms in the interim I think that one probably holds the best promise. I think Social Security and Medicare reform is something that's going to take a much longer time to achieve just because I don't think those issues are there yet...

GIGOT: Right.

RYAN: ...because of the divided government we have.

GIGOT: Medicare is obviously the most politically difficult.

RYAN: I'm familiar with that.

GIGOT: Notwithstanding and not only because of the difficult politics generally, but because your party ran against in the last election the Medicare cuts as part of the health care reform. So does that have -- does that complicate your task this year?

RYAN: Well, if you look at what we said, and some people have dropped the last sentence in this. We were against taking $522 billion of Medicare money to create another government program. And it didn't do anything to contribute towards solvency.

If you look at Rick Foster's appendix to his trustee's report he spells this out clearly. A lot of Republicans dropped that last sentence, and they just were against cutting $522 billion of Medicare.

GIGOT: Imagine that (ph).

RYAN: Imagine that (ph), so political seasonists (ph) do such things. But taking $522 billion, raiding $522 from Medicare to create another entitlement was a really bad idea.

Medicare's going broke. Medicare has the biggest fiscal problem of all of them. So I do believe we need to make some down payments on Medicare reform.

GIGOT: In this two-year period?

RYAN: I think we need to start talking about this. I think we need -- I'm going to have hearings in the Budget Committee on this. So whether -- I don't know whether or not we have consensus in our party or not. I just don't know the answer to your question whether or not in this two-year period we're going to be moving legislation to do this, but I think it's something we need to consider and talk about.

GIGOT: OK. Let me ask you about the politics of this a little more broadly because you're young, but you're still old enough to remember 1995 and 1996 when you attempted, the Republicans, I think you were an aide at the time..

RYAN: Yes, I was.

GIGOT: They were...

RYAN: An aide, not NA.

GIGOT: Yes. He was a -- the speaker at the time pushed dramatic reforms in -- in entitlement, Medicare and Medicaid in particular. And they were your -- there were parties on doing politically, or at least that is the argument...

RYAN: That's the -- that's the historical view right now I would say.

GIGOT: That -- well, I think there are a lot of members of your party who think that.

RYAN: That's right. That's right.

GIGOT: And if you ask Bob Dole I think he would concur with that. So the question is, what is different politically now than then to make you think you could make the same kinds or similar reforms and -- and survive politically?

RYAN: Because the economic day of reckoning is right around the corner. Because the tens of trillions of dollars of unfunded liabilities are right out there in front of us.

Medicare is going insolvent later in the decade. And Medicare is the greatest cause of our debt problems. And because the baby boomers start retiring this year.

We're going from approximately 40 million retirees now to approximately 80 million retirees. We're increasing the benefit consuming generation by 100 percent, but we're only increasing the taxpaying generation by about 17 percent that pay into these programs. And so we have looming insolvency.

GAO gave it -- if you look at the GAO in front of liability figure, it's basically a measurement of all our...

GIGOT: General Accountability Office.

RYAN: General Accountability Office. In 2009 it was a $62.9 trillion figure. In 2010 it was a $74 trillion figure. It's $88.6 trillion this year. So we are going that much deeper into our hole that much faster.

After that 1996 Medicare political football issue, John Breaux, Bob Kerrey and others had this Medicare Commission that President Clinton put together, this bipartisan commission. I think they called it Breaux-Thomas [sic]. And that recommended some innovative reforms to Medicare that would have put it on a path toward solvency.

Alice Rivlin and I co-authored some reforms that are innovative that put Medicare on the way toward solvency. She and Pete Domenici and other -- I forgot what they called that thing, the Domenici-Rivlin commission. They advocated Medicare reforms to put it on the list of solvency.

Let me just tell you what the roadmap does on Medicare. And I'm not suggesting that Congress is going to propose this, but what people like me have been saying is let's guarantee current seniors are going to get the Medicare benefits that they have coming to them, that they've already retired; people near retirement as well.

My bill says if you're 55 and above, you're in the program as currently designed. But if you're under 55 years old, guess what, we've got news for you; it's not going to be there for you. You will have to severely and deeply ration Medicare to seniors at that time if we keep this program going as it is. And the new law puts a lot of these rationing mechanisms in place.

But my guess would be that if you put a question to the American public that said even today with all of those facts about the booming crisis...

RYAN: Sure.

GIGOT: ...which are real, and which, if they were understood, would you favor reductions in Medicare spending in the future you would get 60, 65 percent against? Don't you have a significant education of...

RYAN: We do...

GIGOT: ...challenge ahead of you?

RYAN: And you can begin to make down payments on fixing the budget without having to do Medicare.

GIGOT: Right.

RYAN: But you'll never fully fix our budget situation without addressing Medicare. So whether we do this this year or the next year, I don't know the answer to that question. But it's not something we should ignore. We've got to keep talking about this.

Whether we actually pass legislation, I don't know whether we're going to do that. But we can't stop talking about it.

GIGOT: And I guess my question would be -- is this the kind of major change that you need presidential support for?

RYAN: I think so. I think so.

GIGOT: Either party?

RYAN: I think that's right.

GIGOT: So, to actually accomplish.

RYAN: To accomplish, yes. I do. I believe that.

GIGOT: And so if the president says don't touch Medicare, we just, we need it, we just took 500 million out of it to put to -- to health care...

RYAN: His health care reform.

GIGOT: Then the Republicans, should they march right into the fixed bayonets or publicly? How many sponsors do you have for the roadmap?

RYAN: Well, I haven't reintroduced it. Thirteen, I think, in the last. I didn't -- I wasn't looking for co-sponsors. I -- I can't tell you whether we're going to put comprehensive budget reform or not, but we are going to be talking about comprehensive budget reform.

We are going to be doing hearings on comprehensive budget reform. And I'm still going to be personally advocating my own personal legislation outside of my role as budget chair.

GIGOT: OK. Let me ask you about the president because last time you and I talked, I think it was in November after the election, and you were pretty pessimistic about the degree of cooperation you'd get from the president as you -- the Republicans moved forward on their agenda.

Since then you've had attacks (inaudible) which was something that you supported, and had passed with big majorities in public councils. Does that negotiation lead you to think that perhaps the president really is going to move more dramatically than you thought then on more items where you can actually get things done in this two-year period?

RYAN: No. That deal doesn't lead me to think that because that is something he had to do. He didn't really have a choice in the matter of the fact.

GIGOT: Because what?

RYAN: Because the votes and the date. The tax increase split was happening. Anybody, whether you're a Keynesian or a classical economist, we're arguing at the time it's going to do damage to the economy.


RYAN: He didn't want the damage to the economy, and so he had to do this. Plus, the votes; the votes just weren't there...

GIGOT: Right.

RYAN: ...for his school of thought I guess I would say. So he had to do that. So I don't look at that tax deal as necessarily a sign of things to come with respect to cooperation.

I do believe -- I'd like to think we're going to have some cooperation on some issues. But I think those are going to be more the exception than the rule.

GIGOT: And where would these -- you mentioned trade.

RYAN: I mentioned trade.

GIGOT: Where else? What other areas?

RYAN: Hopefully in some spending reforms. Hopefully on...

GIGOT: Spending reforms like a Gramm-Rudman kind of thing?

RYAN: Yes, some spending reforms like Gramm-Rudman and automatic reductions if you exceed the caps, budget limits, budget caps, some budget reforms perhaps. I have a line item veto that Feingold and I had in the past that I've had with Democrats in the past, hopefully things like that.

GIGOT: And you want to push that?

RYAN: Yes. And that's among the things I'll be pushing.

GIGOT: Does the leadership support that?

RYAN: They always have.

GIGOT: OK. Where else? Where else do you think you can get some agreement with the Democrats?

RYAN: I'm curious to see what he'll do on immigration reform, whether he'll try to make this a political issue or whether he'll try and get some things done on that. Two years is a long time of doing nothing.

Obviously our high priority is getting the border under control. But we also have all these other issues in the immigration law that need to be addressed. And so -- and that's also for economic reasons.

So I wonder out loud whether or not -- I was talking to John McCain about this yesterday. I -- you know he seems to think that there's a shot at this. I don't know if that's possible or not.

Energy policy as well; I would like to think that somewhere there's a chance that this administration will allow us to explore for domestic energy supplies. And I would like to think that we have a shot a that.

GIGOT: And what do you have to give the president...

RYAN: And natural gas...

GIGOT: What do you think the president...

RYAN: I'm thinking more natural gas than oil, but I don't think he's going to open up ANWR, but I think on the inner mountain region on natural gas, I think that's a cleaner burning energy supply. I think there's something there nuclear. I think there's probably some opportunities there. So hopefully on some energy legislation we have a shot at something.

GIGOT: But is the price for that that you have to give the president more clean energy, green energy subsidies, so-called clean energy?

RYAN: Not in my opinion, no. We've already got enough of that stuff.

GIGOT: So you're going after...

RYAN: Oh...

GIGOT: ...as part of some of your budget subsidies for winds or solar or...

RYAN: I was talking about Crony capitalism. That falls into that category.

GIGOT: OK. All right. So he still might -- you still think he might compromise with energy?

RYAN: I don't know. But I think that there's a chance of it.

GIGOT: What about tax reform? Because...

RYAN: That's the other one I was going to mention.

GIGOT: That is -- I mean you have talked about this for a long time. Dave Camp has talked about it for a long time. Even Charlie Rangel has supported in the last conference the cut...

RYAN: Right. Well...

GIGOT: ...the tax rate from 35 down to I think 30.

RYAN: Thirty, 33.5 I think.

GIGOT: And so the president -- and they've hinted, Tim Geithner, the secretary, the secretary's hinted at this. Is that something you think you might be able to get through this year?

RYAN: Yes. And that's what I was basically going to say is the other big piece. And we'll see what he says in the State of the Union Address. I do think so.

Most people -- I've been involved in tax reform, you know, feudal causes for a long time. But they all involve broadening the base and lowering the risk, and so how you do that matters greatly with respect to our economic competitiveness. But I would like to think that we can get consensus on broadening the base and lowering the rates to make our tax more competitive.

So I do hold out some hope that there's a shot at some actual maybe not wholesale fundamental. I'm a Paul-Bush flat tax guy myself.

GIGOT: Right.

RYAN: It's not going to look like that, but hopefully a good step in the right direction to make our tax a bit more internationally competitive and more competitive for small businesses.

GIGOT: So, would you support a more narrow, say sort of flat tax? Say you wanted to just attack a corporate tax structure, lower the corporate tax rate and reduce some of the...

RYAN: Yes.

GIGOT: You would support that?

RYAN: Mm-hmm.

GIGOT: How do you feel that goes with another public caucus? Is that something?

RYAN: Well, I think generally speaking, pretty well. My own tax reform bill basically does that, you know. And the budget I brought to the floor last time, last session, brought the corporate rate down 25 percent, and that's through base broadening measures. So we -- we've already put a plan in the House Republican Caucus.

We have to confront the tax expenditure growing. I mean I've been on Ways and Means now for 10 years, and the tax expenditure lobby has an interest in this. They've succeeded pretty well in protecting those interests through both political parties. We've got to confront that.

And if in 2012 we do our job right, we're looking out for the American people. We're looking out for the American economy. We're not looking out for this narrow special interest that has their little piece of the tax code carved out, which serves to direct a barrier to entry against their would-be competitors. We want growth.

We want real competition. We want a lower barriers to entry. We want the haven of capital formation to be this country, not some other country. And fundamental tax reform is one of they key ways to get there.

GIGOT: All right. There's a debate I want to ask you about right now, going on in the Republican Party about how to handle the debt ceiling. I think the president today submitted his formal request that the debt ceiling be raised. It's going to have to happen sometime this spring. Or the timing -- people disagree about, but sometime within the next few months.

And there are a lot of Republicans, Jim DeMint is one of them, Michele Bachmann another, making this into almost a moral issue saying I will refuse to vote for the debt ceiling increase without major spending reforms. What do you say to that?

RYAN: Well, I don't know if they said without major spending...

GIGOT: They might've said period. They might've said period, that's right. You're right about that.

RYAN: I'm in the major spending reform camp. I don't know about the...

GIGOT: But can you -- can you -- what do you think about that strategy?

RYAN: So, well just refusing to vote for it, I don't -- I don't think that's really a strategy. I believe I don't want a rubber stamp pick up in raising the debts.

Do I want to see this nation default? No. But I want to make sure we get substantial spending cuts in control in exchange for raising debts. That is related. It's not an unrelated item.

And so I believe if this -- if we're going to do this, which obviously you can't default, we need to have some real fiscal fixes in order to do that. This is very serious, something we care a lot about and we're not going to turn the fiscal shift around overnight, but we want to point it in the right direction.

The debt ceiling is not dealing with current spending. It's old spending.

GIGOT: Right.

RYAN: But it's the fiscal recklessness of the past...

GIGOT: It's your watch.

RYAN: It's our watch. And so does -- will the debt ceiling be raised or does it have to be raised? Yes.

You can't not raise the debt ceiling; default is the unworkable solution, or the alternative I guess I'd say, the unworkable alternative. But we do not want to just have some naked debt ceiling increase. We want to have real fiscal controls, real spending cuts that go with this in order to do that.

GIGOT: The senator, you know former senator Phil Gramm once told me that one of his political rules was never to take a political hostage you're not prepared to shoot. And you have to pass a debt ceiling increase.

So that's a hostage you're not prepared to shoot because you can't. So how is that a winning strategy?

RYAN: There are...

GIGOT: How long will we raise the debt ceiling? Are we going to do it for two years? One year?

RYAN: I mean there are different ways of doing a debt ceiling increase that -- that -- that could speak to our strategy. I don't want to get -- I don't like negotiating out in the media how we're going to approach this issue. But I can tell you one thing, Republicans aren't interested in just a naked debt ceiling increase.

GIGOT: So you're going to want something in return for that increase...

RYAN: At a minimum.

GIGOT: ...in conjunction with that increase. What you want remains to be negotiated.

RYAN: Yes. We're talking among ourselves as to exactly what we think would be the best course.

GIGOT: If the president refuses and says, you guys are -- are irresponsible. You're -- you're risking the faith, full faith and credit of the United States and that's irresponsible...

RYAN: I...

GIGOT: That happened in 1996.

RYAN: I think it would be irresponsible if the president brings about a default of the country if he refuses to sign a bill to raise the debt ceiling.


RYAN: That's his choice.

GIGOT: You think you can win that with the -- that battle with the -- when he has the bully pulpit?

RYAN: Hey, look. We're right here on the stage right now aren't we?

GIGOT: I'm a lowly journalist. He's got the -- he's got the bully pulpit and could take it to the public.

RYAN: Nobody likes brinksmanship, but what we really don't like is runaway spending that is bankrupting this country. And we want to see the fiscal direction of this country change. The debt ceiling is a symptom of the fact that our fiscal policy is way off track. We want to do some things that get us pointed in the right direction as this debt ceiling increase occurs.

It's going to be sometime in the spring. A letter this morning says March 31st to May 16th I think. So there's some -- there's a taxable time period. Nobody really knows the answer.

GIGOT: Right. Treasury has some wiggle room for sure.

RYAN: They do, and its receipts and expenditures and things like this that are a little bit unforeseen. So we are not interested in a naked debt ceiling increase.

GIGOT: OK. Another issue that's likely to come up is the fiscal position of the states. And you have a lot of them, including major states that are in very tough fiscal positions, big deficits. And there's a prospect that one or more of them may come to you and say, we cannot avoid truly awful cuts and services without another help from the federal government. What's your response to that?

RYAN: I...

GIGOT: Say California does that.

RYAN: We can't do a bailout. If we bailout one state then all of the debt of all of the states is not just implied, it's almost explicitly put on the books of the federal government. Then the federal debt will go from here to here by the amount of state debt. That -- there seems to be some kind of an implicit belief that these are federally backed; they're not. And so I think that's important.

I'm a supporter of Devin Nunes' bill, which is asking just for a clearer accounting. If you want to enjoy the tax expenditure or tax-free bonds as a state or municipality, give us a clear accounting of your liabilities. They use discount rates of something like 8 percent in many states to measure the pension liability...

GIGOT: Yes, they do.

RYAN: Which is just not reality. And so a, let's get some clear accounting. And b, we're going to have lots of hearings on this. I'm going to do some hearings myself. I know Dave Camp's probably planning a few hearings.

We need to learn more about what states are in what situations. What are the timing of these things, and what's the proper response. And I'm working on something myself on what I think would be the proper federal response to something. But we are not interested in a bailout.

GIGOT: So this is a -- is a flat no. Don't even bring it up here because...

RYAN: Yes...

GIGOT: ...we're not going to...

RYAN: We're not interested in...

GIGOT: They're not going to get a hearing. What if some states tell you, look, we're in danger of default?

RYAN: They're already telling us that.

GIGOT: So take it somewhere else?

RYAN: Should -- should -- should taxpayers in frugal states be bailing out taxpayers in profligate states? Should Wisconsinites, while we're not -- we're going to become a frugal state, but we haven't been one. Should taxpayers in Indiana who have paid their bills on time, who have done their job fiscally be bailing out Californians who haven't? No. That's a moral hazard that we are not interested in creating.

GIGOT: OK. You probably heard some Democrats say that in the repeal of the health care bill is going to be a -- give a big hit to the deficit, increase of the deficit. What do you think of that argument? And why did you exempt repeal from the new budget rules that you put in that make it impossible under the rules at least to increase deficit?

RYAN: Because we're not interested in turning budget gimmickry into our budget rules. The only reason why anybody suggests with anything close to a straight face that this thing reduces the deficit is because the books have been severely cooked. It's not...

GIGOT: That's the Congressional Budget Office.

RYAN: It's not CBO who did the book cooking. It's the Democrats who wrote the bill that gave the CBO which cooked the books.

CBO has to score what you put in front of them. And if you put a bill in front of them that ignores the discretionary costs of the $115 billion you need to spend to run this new Obamacare program, that double counts the Medicare savings, that double counts the CLASS Act revenues, that double counts the Social Security revenues, that does not count the doc fix. You add all that stuff up, net it out; we're talking about a $701 billion whole deficit.

So if you actually do real accounting, get away the smoke in mirrors, get away the gimmicks, this thing is a huge deficit increaser. And so we're not interested in enshrining and endorsing and accepting all the budget gimmicks that the Democrats use to cram this thing through law.

Mark my words this thing will not reduce the deficit. I am very confident in saying that. They have a piece of paper from CBO that they contorted to suggest it does, but that's not reality.

GIGOT: Are you going to seek a rescore from CBO?

RYAN: Well, we got one yesterday or -- I think it was yesterday or today, this morning.

GIGOT: Oh, you did?

RYAN: We got a score, which is about the same that it was before, about $145 billion.

GIGOT: I see. So essentially you're just going to ignore CBO as you push for repeal?

RYAN: We're going to ignore this. We're going to ignore these budget gimmicks, and we're going to push to repeal.

The other thing is the press has been sort of hitting us on this, bringing it up under closed rule this week. We promised the American people we're going to do this. You know I just have this corny notion. Maybe it's because I come from Wisconsin. If you say you're going to do something in a campaign, you do it when you're in office.

In our Pledge for America we said we would bring up a straight up or down vote to repeal this healthcare law. What are we doing? That's what we're doing in office. So that is why we're doing it this week under these circumstances with these procedures because we don't think we should be paying for the repeal of a law that we believe will increase the budget deficit by a minimum of $700 billion over the next 10 years.


RYAN: The deals are a little animated in these things.

GIGOT: Fair enough. The -- the -- you mentioned early on that you want to have a growth engine.

RYAN: Yes.

GIGOT: Yet, a lot of the things that are a necessity you have to do as a budget chairman will -- are cutting, reducing this, reducing that. And the -- the danger I suppose politically is that you become as a party -- get the reputation for austerity.

RYAN: That's right. That's right.

GIGOT: And the president takes the high ground and says, I'm the growth guy. They're cutting. We need to be spending for investments, for growth, and we need -- and I'm the growth candidate. And you will begin to look small and austere. And we're the -- we're the national accountants essentially.

RYAN: Right. Right.

GIGOT: What -- how do you...

RYAN: How do you avoid the green-eyed shades?

GIGOT: How do you avoid that? Obviously rhetoric is a part of it. But apart from rhetoric, what do you do when the budget resolution and the policy...

RYAN: Policy.

GIGOT: ...to be able to -- to avoid that austerity label?

RYAN: And a lot of these policies will be on just the budget itself. I -- let's focus on the foundations that we need for economic growth. I am not one of these people that think that you can perhaps just grab some big bill with a magic silver bullet and turn the economy around.

Let's go focus on the macroeconomic foundations, low tax rates. That's something we can do in a budget resolution, tax reform.

GIGOT: You can put a tax deal...

RYAN: In your budget resolution you assume whatever tax dollars you're going to have going forward.


RYAN: So tax reform is number one. Low tax rates are key ingredient to economic growth opportunity and now in this 21st century international competitiveness.

We need to go after regulation, and that's not something you do in a budget, but that's something you do in all the other committees we have. Which is we need regulatory certainty. We need businesses to understand what the rules of the road are, but we need to fair regulations as well.

We need fair, honest, efficient, transparent, accountable regulations. So that's the second thing we have to address to get growth in this economy.

We also need sound money. And that's not something you necessarily put in a fiscal policy document, but we need to become the party of sound money. Our money has to be honest. It has to be reliable to our value, and we have to deal with the fact that we have a Federal Reserve and a monetary policy that is anything but sound.

GIGOT: But that suggests, that implies that you're going to bring up Chairman Bernanke and talk about monetary policy...

RYAN: Absolutely.

GIGOT: ...and...

RYAN: I'm planning on doing it in Budget Committee. I'm sure Ron Paul has a few plans of his own.

GIGOT: Are you going to push your bill for the single mandate from the dual mandate for unemployment?

RYAN: Yes, I am.

GIGOT: You're going to push that?

RYAN: I am.

GIGOT: You want to seek a vote for that in this Congress?

RYAN: Yes. I'm going to be introducing this bill.

GIGOT: And you hope to get a vote on the floor.

RYAN: I don't have the -- it's not my choice to decide, but I hope to do that, yes.

GIGOT: OK. So what else?

RYAN: So -- so we need to focus on these foundations, sound money. We need also things like tort reform. We need to do the things we -- that are important to get growth in this economy, get business certainty and make ourselves more internationally competitive. And trade as well.

We need to have a growth agenda: trade, low tax rates, sound money, sound regulations. Those are the kind of building blocks we need to have an economic growth and prosperity agenda to make us internationally competitive. Some of these things are within the budget documents. Some of these things our other bills will have to pass.

And I would also tack on top of that an interview policy that creates jobs here at home, that makes us less dependent on foreign oil, that lowers commodity prices, that lowers fuel prices. These are the kind of things that we need to do to get growth. And so yes, we need to cut spending.

But let me just close with this because I can tell somebody's waving at you to...

GIGOT: Well, we want to open it up to questions, but...

RYAN: We are -- it's important that we're the growth party. And cutting spending now is really not pain in root canal. Wait until we don't do that and what happens later.

The question we have for ourselves in this country is, do we reform government, reform our entitlement programs, get these programs that were written in the 20th century to work in the 21st century and have pro growth policies that help our businesses that make us internationally competitive? That's growth.

What austerity is, what pain is, is doing nothing, staying on the path that we are on, and then having our own debt crisis and having our own European kind of a fix where you're cutting current seniors and raising taxes on the current economy to slow us down in managing our decline.

So the question which we still can't answer, is do we have a pro-growth policy...

GIGOT: Right.

RYAN: That gets us growing again because without economic growth you can't fix this budget problem. Or do we manage, muddle slow, stagnant growth, watch us tip over to a debt crisis and then we manage our decline even farther into a critical degree of a welfare state?

The morality of this also has to be addressed. I know you want me to wind it down. But we're coming to a country where we're getting more and more takers than makers in America. And we need to have more makers and less takers in America because if we have more takers, then we're denying people their ability to make the most of their lives.

We don't want to turn our safety net into a hammock that lulls people into lives of complacency and dependency and drains them of their incentive and will to make the most of their lives. And that is the outcome of these kinds of policies that we're discussing.

GIGOT: All right.


All right. We want to open it to the floor. First of all, we do have a -- we do have mics. So please wait for a mic. And then please identify yourself when you -- when you ask a question.

The gentleman in the far corner?

QUESTION: Thanks, Mr. Chairman. Jon Ward of the Daily Caller.

On the issue of entitlements, you mentioned that that is basically the biggest area where you think you'd like to create a contrast with the Obama administration.

RYAN: Just the budget itself, I would say. The biggest area of contrast -- I wouldn't say only entitlements. I'd say all of the budget; discretionary entitlements, tax dollars, everything.

QUESTION: OK. But entitlements is the biggest piece of that, the biggest piece -- part of the problem.

You also said you need to pass legislation to create the contrast. But judging from the last time I heard you talking about the roadmap versus now it seems like less of a likelihood.

There also seems to be less willingness to put spending cuts out there before the States of the Union. So are Republicans kind of backing off the willingness to really go first on this?

RYAN: Well, we have a spending cut on the floor today. We're cutting Congress' own budget. We're going to be putting precision bills on the floor. I don't know -- I can't speak to the timing of before or after the State of the Union, but we're going to be bringing spending cuts to the floor repeatedly, all first quarter long.

I'm not suggesting it's -- the budget's going to be one thing or another. I don't know what the budget resolution's going to do.

So that -- I'm not trying to be evasive, I just don't know the answer to the question because a, I don't have a baseline yet. b, it's a collaborative process that is consensus driven, and we haven't gone through that yet. And c, we haven't done our committee hearings. We haven't done the kinds of research that we intend to do to help formulate good public policy.

It's not as if we just wound up in the majority and we have everything figured out. If you haven't noticed, Congress hasn't done a lot of oversight in the last few years. Both parties are to blame for this.

We need to do some oversight. We need to get into policy. We want to bring governors up. We want to bring innovative policymakers in to discuss how best to achieve these goals of keeping America exceptional and preempting this debt crisis.

So we haven't done all of that yet. So it's impossible for me to tell you what the budget resolution's going to look like.

Do I -- the question was -- the mic was turned off...

GIGOT: Yes...

RYAN: Do I -- do I myself want the roadmap in the budget?

I never intended when I wrote the roadmap that this was going to be the budget for the platform for the Republican Party. What I intended on doing was creating a debate, creating a discussion, getting in the pool and encouraging other people to jump in with me so we can discuss how to fix these fiscal problems in the country.

What I wanted to show with the roadmap is you can still have the American dream. We can still have the American idea. We can still keep our government limited. We can still keep our economy free. It's not too late, given our budget circumstances.

I think I've achieved that. And what I wanted to do was advance the discussion to an adult level. It's not quite yet there, but it's getting closer. The commission helped, but it's getting closer.

So when I wrote the roadmap, that was not me saying here's exactly how to do it and this is the only way I'm going to go; far from it. What I was trying to do was show here's one way of doing it, and here's how I personally thing is a better way to go. But I want other people to bring their ideas to the table to get the best outcome.

And now we're in the process of getting other people to bring their ideas to the table so we can get the best outcome. We haven't completed that process yet, so that's why I can't tell you what the budget's going to look like. I got sworn in yesterday. Give us a break.

GIGOT: OK. Matt? We got a mic right here up front.

QUESTION: Thanks. Matt Miller with the Washington Post.

In the spirit of the adult conversation, the roadmap, according to the CBO letter you had on it, doesn't balance the budget until after 2050. And still adds trillions of dollars to the debt in the interim. Now that you're in the majority, what year do you think the budget should be balanced?

RYAN: I don't know the answer to that question. I don't even have a baseline yet.

QUESTION: Well, but you know that we're around...

RYAN: Well, I think it should be balanced this year.

QUESTION: trillion dollar levels of deficit.

RYAN: I think it should be balanced this year.

QUESTION: But you don't really.

RYAN: I mean well you asked me what year I -- it's really kind of a question that...

QUESTION: But the roadmap is considered a fiscally conservative...

RYAN: Right.

QUESTION: ...aggressive plan, has a 40 or 50-year plan to balance the budget. In the majority that can't suffice, right?

RYAN: So this just shows you how awful the numbers have become. This just shows you how deep of a fiscal hole we've got. We are not measuring our budget deficits in billions anymore. We're measuring it in trillions now.

And it also shows you the demographic shift that has occurred in this country. The baby boomers are now this year starting to retire at full retirement. So what budget people call on the chart graph, it's the pig in the pipeline. It is the big, demographic bulge that is moving the numbers through the system, which is preventing that balance from occurring quickly.

If you choose to grandfather the grandparents, which is what the roadmap does, then that does require more spending or borrowing to finance entitlements for people who are currently on them, given more people are retiring because of baby boomers.

So this just shows you how tough this is. This just shows you how you're not going to balance the budget in a couple of years.

And so what do I want to do? I want to balance the budget as quickly as possible. I can tell you one thing. It won't balance soon if we don't growth this economy. If we don't get jobs and economic growth turned back on in this country, we're not going to balance the budget anytime soon. That's got to be a key focus.

CBO, joint taxpayers, they don't really measure that stuff. We need pro-growth, economic prosperity. That combined with spending reductions and spending reforms is how we're going to balance sooner than down the road.

GIGOT: OK. Let's take one from over there. Yes, right in the middle there, the woman. We got a -- so we can hear it on C-SPAN and other places, we'd like to get the microphone if we could. Right there. She's got her hand up.

QUESTION: Hi. My name is Jennifer DePaul with the Fiscal Times.

You talked about all these spending cuts that you're going to introduce. Do you have any specifics? Anything tangible that we can look to you? And also, my second question is, are you considering a run for the Senate in 2012?

RYAN: So, I thought you were going to ask me about the Packers or something like that. Well, the ideal job that I always wanted is taken by a guy named Aaron Rodgers. And I'm probably never going to get that job.

First, again, I try not to do the appropriators' job. And they really don't like it when I do try to do that.

What I do as the budget chairman is I set the spending limits. And so what I'll do is set the spending limits, and we're setting it very low. And it's then the Appropriations Committee, after their oversight hearings, to come up with the specific list of spending cuts.

So I'm going to have to -- I'm not trying to pass the buck, but that's their job. They're going to be doing the hearings, and they're going to be coming up with a list of specific spending cuts that are needed to achieve the spending limit that I will have -- that we will have put in place and given to the Appropriations Committee.

As far as 2012 is concerned, I'm not thinking about 2012. I'm thinking about right now. I'm thinking about this budget. And when we're through this budget season I'll think about other things. But right now I'm just thinking about this. It's not even on my mind.

GIGOT: Gentleman in the white shirt right here.

QUSETION: Matt Drover (ph) with CNSNews.com.

It seems to be the elephant in the room here is funding for the health care reform law. You know I think everyone expects that the repeal bill will pass the House and then either not pass the Senate, or certainly not get signed by the president.

Will -- in your budget, will there be any funding for the -- for that -- for that bill?

RYAN: Obviously we plan on repealing it, and our budget should reflect the repeal of the health care law. And we will do that.

The real question I think you're trying to get at is de-funding this -- this law. That occurs in the appropriations process. So what the budget does is it sends the numbers, the cap, to the appropriators. They write the spending bills. And inside of those spending bills is where we do plan on pursuing other mechanisms of trying to repeal this law.

GIGOT: Red shirt. Right in the back here on the inside. That's Jonathon.

QUESTION: Jonathon Nicholson (ph) with BNA (ph).

Just to get back to something Mr. Gigot brought up earlier about defense and the need for an adult conversation. Some of the deficit groups note...

RYAN: Some what?

QUESTION: Some of the deficit groups note that non-security spending, which is like non-defense plus V.A., homeland, is only about 15 percent of overall federal spending. To what extent -- you guys have been focusing on that. But to what extent is it credible to say you can make a decent sized dent in the budget without at some point also going after defense, V.A., homeland?

RYAN: Well, because that category of spending you just mentioned went up 24 percent over the past two years. That category of spending, if you combine the stimulus package on top, which was mostly in that category of spending around 84 percent; this was a gusher of spending in this particular category of government, and we want to bring this category back. That's why. It got a huge increase, which contributes to a much higher spending base.

And by the way, all that spending was supposed to keep our unemployment rate from getting above 8 percent. It's around 10. It didn't work. Those of us who aren't Keynesians were suggesting that at the time. But now we're about a trillion dollars out the door when it's all said and done with the borrowing costs. And we've got a big debt and deficit hangover because of it. We want to try and take some of that spending back.

GIGOT: All right. Second row on the far corner there. There.

QUESTION: Mr. Chairman, Mr. Gigot, Veronique de Rugy at the Mercatus Center at George Mason University.

I hate to put you on the spot for your party, but I'm going to do it anyway.

RYAN: You always do it anyway.

QUESTION: I know. I -- I just -- there's nothing really. I mean I trust you entirely, which is very unnatural for me. But I -- there's nothing in the...


RYAN: Former (inaudible)...

QUESTION: ...Republican Party that signals to me that you know all the mistakes of the past 10 years and all the big government mentality is gone. And, and can you reassure me?

And then I have actually a -- an easy question, which is you're talking about you know lowering these budget caps, but what are the budget reforms and the budget process reform that you're going to put in place in order to make sure that actually the budget rules bite.

RYAN: Right.

QUESTION: Because right now they don't. Emergency spending and...

RYAN: OK. OK, so to assure you. The only thing we can do to assure you that -- that the current Republican majority won't go the way of the last Republican majority is to define ourselves through our own actions. Look at the rules package we just put out there yesterday. We have cut bills, cutting spending to pay for other spending if you're going to have other spending. We have -- if you're going to actually cut spending in appropriations we're going to save that money for deficit reduction. We -- we changed the institutional bias against taxing and spending in favor of cutting spending. Now we have to go and change the policy bias in favor of re-limiting government and promoting free enterprise. Those are the things that are going to dominate our actions as this year and this session goes on.

And the only thing I can really tell you is you just have to watch us and hold us accountable. If you think that we believe that we were validated in this last election, that this was all of us an election that gave the Republicans the majority, we don't think that. We're very humbled by what just happened. This was a repudiation election. This was an election that was a repudiation of the direction of the president and his party took the country. This was not a validation of us. And we have to earn this trust in support of the American people by being who we say we are. And that's the mistake the last majority made, the last Republican majority. They said they were conservative, they said they were fiscally conservative. They didn't govern like that. And so we've got to make sure we do that. What kinds of fiscal controls? We want real binding spending caps with real enforcement mechanisms. I call it the belts and suspenders approach. Sequesters, I mean I won't get into the gory details, but...

GIGOT: But if you exceed the budget resolution limits then you have an automatic slice and dice...

RYAN: Yes. Automatic cuts across the board.

GIGOT: ...cutting across the board.

RYAN: So the belts and suspenders approach. Those of us -- Jeb Hensarling and I have been toiling in the vineyards of budget process reform for many, many years. And please know that we fully intend on moving forward with these kinds of packages.

GIGOT: All right. Sorry, this has got to be the last question. Yes, sir, you there in the -- in the brown shirt I think.

QUESTION: Hi. I'm Mark Schoeff from InvestmentNews, and I'm wondering if you could elaborate a little bit on the tax expenditure gauntlet.

Do you believe that there's a Republican majority in the House to eliminate items like the tax exclusion for retirement plans and for the tax deferred status of cash buildup in life insurance plans?

RYAN: I'm not going to get into this tax expenditure or that tax expenditure. We're going to lots of hearings. I mean I just can't answer the question. We haven't even done hearings. We're going to start doing hearings on Ways and Means Committee on these things on the efficacy of tax reform and what's the best way to go about base guarding and rate lowering.

So do I believe that there's a -- that the majority -- that there's a majority within the majority for tax reform? Yes, I do. We have to figure out how best to achieve that, and I can't answer that question yet because we haven't even begun to do our hearings and our research on this.

GIGOT: One quick thing that we're going to ask. Are you going to run for -- Senate in 2012?

RYAN: She just asked me that.

GIGOT: But you didn't answer it.

RYAN: I haven't even given any thought to it. I have no plans of doing so at this time. I'm focused on the budget season. When the budget season's over with, I'll think of these things then.

GIGOT: And my Freudian slip on the president?

RYAN: That I can say no.

GIGOT: Well, thank you very much, congressman.

RYAN: Thank you, Paul.

GIGOT: Thank you for being here.

Thank you very much to all of you. Thanks to e21, thanks to the Manhattan Institute and a very lively session. Thanks so much.