Paul Ryan Moves Idea Factory to Tax Panel in New Stage

By Richard Rubin

Photographer: Scott Eells/Bloomberg

U.S. Representative Paul Ryan is poised to take charge of the House Ways and Means Committee in January.

For most members of Congress, the chairmanship of the House Ways and Means Committee is the ultimate prize, a treasure trove of power and campaign cash cracked open after decades in the trenches.
Paul Ryan is about to get all that and more before he turns 45. The 2012 Republican vice presidential candidate is poised to take charge of the committee in January, giving him a chance to put his limited-government philosophy into practice and test his ability to forge compromises.
The committee will let Ryan advance his plans to cut tax rates, consolidate programs for low-income households and implement a more market-based approach to Medicare. He can bank the millions in donations that flow to the chairman and raise his n
ational profile even higher as he contemplates a presidential campaign.
“Now, you’re actually talking about where the rubber meets the road,” said Bill Hoagland, a senior vice president at the Bipartisan Policy Center in Washington who was a Senate Republican staff member with Ryan in the 1990s. “He has a following out there, and if anything, it’s going to put pressure on him to produce, perform and actually govern.”

Requires Compromise

The post comes with peril. Any substantial accomplishments -- at least for the two years that President Barack Obama will remain in office -- would require compromising with Democrats, which could hurt Ryan’s standing with the Republican base.
Yet significant progress toward Ryan’s philosophical ideals would require making choices on entitlement programs and tax breaks that may not be popular with the broader electorate. That’s a complication for his possible presidential aspirations -- and potentially those of other Republicans running in 2016 who will be pressed on whether they support his approach.
“It’s like having a wife and a mistress,” said Representative Jim McDermott, a Washington Democrat and Ways and Means member. “You can’t satisfy either one of them. So he’s going to have an impossible situation for himself.”
Ryan, a 44-year-old from Janesville, Wisconsin, hasn’t decided yet whether he’ll seek the presidency in 2016, and he’s young enough to wait four or eight more years to run. He also has professed a lack of interest in another promotion, to be speaker of the House.

Intellectual Leader

Even if he doesn’t run for the White House, Ryan is seen as a potent force in the 2016 presidential primary. As the Republican intellectual leader on fiscal policy, by reputation and soon by title, he’ll be able to shape the party’s agenda.
Ryan -- a conservative idea factory and ideological archenemy of Democrats -- isn’t commenting definitively about his political future or his priorities for Ways and Means in 2015. It’s not clear if he would take the committee post if he’s planning to run for president.
He told interviewer Charlie Rose on PBS last month that it’s “not in good form” to talk too much about the committee until after the Nov. 4 midterm elections. He and his staff wouldn’t comment for this story.
Ryan, currently chairman of the Budget Committee, was first elected to Congress in 1998. If he gets the chairmanship, he’ll have the fastest path to the post in 92 years.
He will have competition for the Ways and Means gavel from Representative Kevin Brady, a Texan with more seniority but less national appeal and fundraising prowess than Ryan. House Republicans will make the final call before the new Congress begins in January.
The winner of the Ryan-Brady contest will succeed Representative Dave Camp of Michigan, who reached the party’s six-year term limit for committee chairmen and ranking members and chose to retire from Congress.

Six-Year Clock

That six-year clock for Ryan would start ticking with the new Congress in 2015 and with no guarantee of a friendly partner in the White House until 2017 at the earliest. Even if Republicans control the White House and both chambers of Congress, Senate Democrats could still use procedural tools to block bills.
Ryan, who would become the youngest Ways and Means chairman since 1861, will have to work fast. It can take months to write and move a major bill through the committee, and politically opportune windows for major changes rarely stay open for long.
“You have to put your plans on turbocharge,” said Jon Traub, managing principal for tax policy at Deloitte Tax LLP in Washington, who was Camp’s staff director when he took over Ways and Means in 2011.

Issue Breadth

The Ways and Means Committee -- the oldest panel in Congress -- is invariably labeled powerful because of the breadth of issues it controls. The tax code, trade agreements, Social Security, Medicare, welfare programs, unemployment compensation and parts of Obamacare all are in its orbit.
In reality, the job can be a bit of a slog. The modern Congress is gridlocked along party lines, able to agree on little more than naming post offices and keeping the lights on - - and sometimes not even that. The leaders in the House and Senate have centralized power, wary of allowing chairmen to advance plans that expose intraparty fissures.
Camp spent much of his time at the helm of Ways and Means coming up with a detailed plan to revamp the U.S. tax code. In a sense, he was trying to fill in the blanks of Ryan’s budgets, which called for lowering tax rates and curbing breaks.

Routine Maintenance

Along the way, Camp was sidetracked by recurring crises -- debt-limit fights, patches to prevent doctors’ Medicare reimbursements from being cut and the tax-and-spending fiscal cliff at the end of 2012.
By the time Camp put out a draft tax plan in February 2014, the political moment, if it had ever existed, had passed. The details enraged some Republican lawmakers, and House Speaker John Boehner described the draft as the start of a conversation. Camp never brought the plan to a vote.
Ryan has watched and participated in all of that. Can he be different?
He already is.
No one else in the House today has been on a national ticket. That 2012 experience running with Mitt Romney helped make Ryan the rare House member who is a sought-after campaigner in Senate races across the country. This past month, he went to Kansas to stump for Pat Roberts in a surprisingly tough re-election fight and to North Carolina to help Thom Tillis try to topple Democrat Kay Hagan.

Fundraising Operations

Ryan already has one of the most potent fundraising operations in the House, collecting more -- $8.8 million this election cycle -- than any member other than Boehner. The chairmanship almost certainly will bring more.
Camp’s haul in the 2008 cycle, when he was a senior member of the House minority, was $2.2 million. It more than doubled, to $4.5 million, in his first two years as Ways and Means chairman, according to the Center for Responsive Politics, a Washington research group.
Ryan draws support from small-business owners and retirees across the country, not just in his district south of Milwaukee. In the 2010 election cycle, about 56 percent of his donations came from outside Wisconsin, according to the Center for Responsive Politics. This year, it’s 83 percent.
Inside the House, he serves as a validator when House leaders are trying to sell a proposal.
“He has the trust of the members,” said Peter Wehner, a senior fellow at the Ethics and Public Policy Center and an occasional adviser to Ryan. “That’s important. He’s liked and trusted. He’s a default person on a lot of public policy.”

Moving Republicans

He’s also a bridge between Republicans and the world of conservative research groups, where he once worked with his mentor, the late Jack Kemp.
That combination of skills and prominence helped Ryan move Republicans in his direction. Ideas that just a few years ago were unpopular or politically toxic -- converting Medicare into a premium-support system or balancing the budget in 10 years -- now routinely have support from many members of the party.
Ryan, a genial gym rat, gets personality points even from his political opponents.
“You don’t feel like you’re talking to some extremist,” said Robert Greenstein, president of the Center on Budget and Policy Priorities, which advocates for low-income households. “You’re having an interesting conversation with a smart, thoughtful guy.”
On policy, however, Greenstein says, Ryan is someone who is “very ideological, very hard line, very partisan.”

Cutting Deal

Because of the way the congressional budget process works, Ryan has rarely been in a position to make law -- or compromises.
The budget is a once-a-year project that doesn’t require a presidential signature, and in several recent years, the Republican House and Democratic Senate haven’t even attempted to reconcile their competing plans. Ryan’s biggest bipartisan accomplishment was a deal he struck last year with Senator Patty Murray, a Washington Democrat, to set spending levels.
“You do have some people in the Republican Party who intuitively, instinctively believe compromise is bad and they don’t seek it,” said Wehner, who hired Ryan at Empower America, Kemp’s research group, in 1993. “That’s not Ryan.”
After four budgets, a 2014 policy paper on poverty and a book, the Ryan philosophy is well-known.
“Under liberal progressive policies, the federal government has grown too unwieldy and unresponsive,” he writes in his 2014 book, “The Way Forward.” The alternative, Ryan writes, is a “simpler, smaller, smarter” government.

Frequent Target

Those beliefs -- and the changes to entitlement programs that follow from the philosophy -- have made him a frequent target for Democrats who say his plans would shred the social safety net.
“He’s a nice young man, nice enough, pleasant enough in his personality,” said McDermott, who has known Ryan as a Republican staff member and now an adversary on Ways and Means. “His philosophy is what is sort of hard to understand.”
What’s unknown so far is how aggressively he’ll push to get any of that done and how successful he will be.
Does he want to make law or just make a point? If he picks up the Camp tax plan, what, if anything, does he change?
Among the first decisions Ryan will have to make is one he’s already been hinting at: The rules for revamping the tax code.
Ryan last month reiterated support for what is known as dynamic scoring, including the idea that tax cuts can induce economic growth and generate revenue that can then help pay for the tax reductions.

‘Fundamental Conflict’

That’s a controversial approach that doesn’t work under the current rules Congress uses for analyzing legislation.
“There’s a fundamental conflict between the Mr. Ryan who has professed great concern about long-term fiscal sustainability for the federal budget and a Paul Ryan who starts off the bat by changing the baseline and invoking dynamic scoring,” Greenstein said. “If he starts out doing those things, the idea of a statesmanlike bipartisan approach is dead before it starts.”
As for those political ambitions, the history cuts both ways. The past three Republican Ways and Means chairmen -- Camp, Bill Thomas and Bill Archer -- all exited Congress when they reached the six-year limit without running for higher office.

Mills, Rostenkowski

Three of the past four Democratic chairmen -- Wilbur Mills, Dan Rostenkowski and Charles Rangel -- lost the chairmanship amid scandals. The fourth, Al Ullman, lost re-election to his House seat in part because of a controversial tax plan.
For a successful model, Ryan may have to look further in the past, back to 1889.
Back then, there was a Republican from the Midwest with a Jan. 29 birthday (just like Ryan) who ascended to the Ways and Means chairmanship in his 40s.
Eight years after taking the gavel, William McKinley was president.