Newt Gingrich Letter

From Paul Revere to Paul Ryan

Monday was the 236th anniversary of Paul Revere’s midnight ride to warn John Hancock and Samuel Adams that British troops were coming to arrest them and seize colonial arms at Concord.  While riding, Revere stopped at houses along the way to warn everyone that “the British are coming.”  His warning galvanized patriots to meet the British at Lexington and Concord, leading to the “shot heard around the world” and the first military battle of the American Revolution. 

This year the anniversary fell on the same day  income taxes were due.  It was unfair taxation that sparked the protests in Massachusetts and other colonies against British rule that came to shape the Founders’ view of limited government. Today, an out-of-control government spending our nation into a debt crisis has sparked another rebellion.

Today, Congressman Paul Ryan has been our generation’s Paul Revere, warning his fellow Americans about the coming danger and rallying us to a plan to meet the threat head on.

Paul Ryan’s Path to Prosperity

The 2012 “Path to Prosperity” budget plan Paul Ryan wrote was passed by the House last week. His plan stands in stark contrast to the 2012 budget proposed by the White House earlier this year.  Unlike Ryan’s plan, President Obama’s budget proposal did not deal with entitlement spending, which encompasses the largest share of the federal budget.  This led to the president’s budget being widely panned as unserious about the urgent challenge of our time. 

In a tacit admission that he had failed to provide leadership on the deficit, President Obama wanted a do-over.  Last week he gave a speech  to try and regain the high ground and compete with the serious proposal offered by Ryan.  Instead, he offered a campaign-style partisan response that only served to diminish him.

In last week’s newsletter, I proposed two big tests by which to measure the president’s plan to tackle our looming deficit crisis. 

The first was whether his plan would create jobs or destroy them.  Trying to balance the budget without addressing unemployment is futile.  The most immediate step necessary to move towards a balanced budget is to employ the policies that lead to job-creation.    The more people moved off the welfare roll and onto payrolls will decrease the need for food stamps and unemployment compenstation.   Working people pay tax dollars instead of receiving them through welfare.

The second was whether his plan to control the cost of entitlements relied on merely squeezing the current systems through rationing, reduced benefits and cost controls or if he proposed fundamental structural reforms that would deliver better results at lower costs. 

On both tests, the president failed spectacularly.  The president proposed nearly $2 trillion in tax increases that would destroy jobs and flatly rejected the idea of fundamental reform of Medicare and Medicaid, proposing instead to kick the can to a board of unelected bureaucrats to find ways to save money within the boundaries of the current system, through even more rationing than what has already been enacted under Obamacare.

In his speech, the president lauded the effort of Republicans and Democrats to work together to balance the budget in the 1990s.  Yet the solutions he proposed in his speech are precisely the opposite of what Republicans did when I was Speaker. 

We passed the first tax cuts in sixteen years to encourage the private sector to create jobs, including what Art Laffer called the largest capital gains cut in history.  This led to a drop in unemployment from 5.6% to below 4%. We also successfully reformed welfare to lift the poor out of poverty in much the same way Paul Ryan proposes to save Medicaid.  And we actually increased defense spending as opposed the Obama who proposes to cut it.  Through those pro-growth and pro-freedom measures, we balanced the budget and paid off over $405 billion in debt.

Just as troubling than the bad plan put forward by the president was the extraordinary partisan spectacle he engaged in when he slandered Paul Ryan and the GOP 2012 budget.  The distortions the president employed while describing the Ryan plan were so malicious, that I wanted to give Congressman Ryan the opportunity to respond himself in this newsletter. 

The following is from Congressman Ryan himself and refutes the president’s most erroneous claims. 

Paul Ryan Responds

Two months ago, the President introduced an unserious budget that locks in Washington’s spending spree, adds $13 trillion to the debt over the next decade, and accelerates our nation toward a fiscal crisis. His budget imposes $1.5 trillion in tax increases on job creators and American families, stifling the private-sector job creation that we urgently need. His budget commits seniors to bureaucratically rationed health care, burdens families with ever-higher taxes, and consigns our children and grandchildren to a diminished future.

Two weeks ago, House Republicans advanced their Fiscal Year 2012 budget resolution – The Path to Prosperity.  The House Republican budget spurs economic growth and job creation, strengthens the social safety net for those in need, fulfills the mission of health and retirement security for all Americans, and lifts our crushing burden of debt. The Path to Prosperity prevents the President’s tax increases and instead focuses on the root cause of our debt problem: wasteful Washington spending. The House Republicans’ budget reduces government spending by $6.2 trillion over the next decade, and puts the budget on a path to balance in the years ahead.

The Path to Prosperity has reshaped the budget debate – giving the American people an honest assessment of our fiscal challenges and delivering real solutions that restore the promise of our exceptional nation. In the wake of criticism that House Republicans were leading where his budget had failed, the President followed with a speech intended to show that he shared our concerns about the nation’s most urgent fiscal challenges. Unfortunately, instead of delivering solutions, the President delivered a partisan campaign speech, heavy on overheated rhetoric and light on ideas. Where the President did offer ideas, it was more of the same: huge tax increases and a plan for Medicare that builds on last year’s government takeover of health care and involves restricting seniors’ access to care.

As I noted last week, the President’s speech was excessively partisan, dramatically inaccurate, and hopelessly inadequate to the task of averting a fiscal crisis. 

Let’s examine further the factual missteps and egregious errors in the President’s speech.

Discretionary Spending

CLAIM: “A 70% cut to clean energy. A 25% cut in education. A 30% cut in transportation. Cuts in college Pell Grants that will grow to more than $1,000 per year. That’s what they’re proposing.”

REALITY: The House Republican budget simply returns non-defense discretionary spending to below 2008 levels. What the President is inadvertently admitting is that he and his party’s leaders in Congress have increased spending by these breathtaking amounts.  Americans elected a new Republican majority in 2010 in part because they were appalled at this lack of spending discipline. The House Republican budget simply adheres to our mandate to stop the Democrats’ unchecked spending spree.

CLAIM: “These aren’t the kind of cuts you make when you’re trying to get rid of some waste or find extra savings in the budget… These are the kind of cuts that tell us we can’t afford the America we believe in.” 

REALITY: Incorrect. By returning spending to below 2008 levels, they are the kind of cuts that tell us we cannot afford the Democrats’ unsustainable spending spree. The President has every right to defend his spending record, but implying that common-sense spending restraint is un-American crossed the line.

Medicare

CLAIM: “[The House Republican budget is] a vision that says America can’t afford to keep the promise we’ve made to care for our seniors.”

REALITY: The President’s commitment to the status quo will end Medicare, period. According to the non-partisan CBO, Medicare will go bankrupt in nine short years.  The President announced in his speech that he would rely on strict limitations on how much care seniors could receive in order to achieve savings. Contrary to the President’s opinion, CBO does not believe this would result in lower costs.  Current seniors would receive less care through Medicare against a backdrop of relentlessly rising health care costs. 

This stands in sharp contrast to the House Republican Budget, which gives seniors the tools to fight back against rising costs by empowering them in a personalized Medicare program, giving future generations the same kinds of health care choices members of Congress now enjoy.

CLAIM: “It says that ten years from now, if you’re a 65 year old who’s eligible for Medicare, you should have to pay nearly $6,400 more than you would today.”

REALITY: This is a false comparison based on a false reality. As mentioned above, the CBO reports that Medicare’s trust fund will become insolvent in nine years unless we act. This would necessitate harsh restrictions on seniors’ access to care – the kind of restrictions that the President himself alluded to later in his speech. The President is taking CBO numbers out of context and omitting the CBO’s clear warnings about Medicare’s impending bankruptcy.
That’s why comparing a Republican plan that saves Medicare to an unsustainable status quo means comparing a real solution with a false reality. The Medicare program as it exists today cannot exist in the future. The real choice is this: Do we act now to protect the program for current seniors while building a strengthened Medicare for future generations? Or do we restrict access to care for current and future seniors, as the President has proposed, while ignoring our crushing burden of debt until it becomes a fiscal crisis?

CLAIM: “It says instead of guaranteed health care, you will get a voucher.”

REALITY: The changes in the House Republican budget will not affect those in and near retirement in any way. When younger workers become eligible Medicare, they will be able to choose the kind of plan that best suits their needs from a list of Medicare plans that are guaranteed to offer coverage to all beneficiaries regardless of pre-existing conditions. Medicare would then provide a payment to subsidize the cost of the plan. This is not a voucher – it is a payment that flows through to whatever plan recipients choose.

CLAIM: “And if that voucher isn’t worth enough to buy insurance, tough luck – you’re on your own.”

REALITY: Under the House Republican Budget, Medicare will provide increased assistance for lower-income beneficiaries and those with greater health risks, guaranteeing that Medicare will be there for those who need it most. Wealthy seniors will receive less assistance, and the Medicare benefit will grow every year, while using competition to lower costs and make health care for seniors more affordable.

CLAIM: “Put simply, it ends Medicare as we know it.”

REALITY: The President’s plan – a commitment to the status quo – condemns Medicare to a bankrupt future.  The greatest threat to the health security of America’s seniors is the President’s plan to deeply and systematically ration Medicare.

Medicaid

CLAIM: “This is a vision that says up to 50 million Americans have to lose their health insurance in order for us to reduce the deficit.” 

REALITY: Republicans have a vision for patient-centered health-care that requires the removal of the partisan roadblock to reform that the President and his party’s leaders enacted last year. Our budget repeals the government takeover of health care to make way for reforms that will make health insurance more affordable and accessible for Americans.

Contrary to the President’s false claims that the House Republicans’ Medicaid reform plan would leave millions without coverage, Medicaid spending grows every year under our budget. The Medicaid program is already failing those who need it most, because excessive federal mandates have made it so that the only way for states to control costs in the current system is to lower doctor reimbursement rates. This is why so many doctors refuse to see Medicaid patients.  States need to be able to tailor their Medicaid programs to the needs of their unique populations. Our reforms help them create better programs. The President’s approach is just to throw more money at a broken system.

Taxes

CLAIM: “Worst of all, this is a vision that says even though America can’t afford to invest in education or clean energy; even though we can’t afford to care for seniors and poor children, we can somehow afford more than $1 trillion in new tax breaks for the wealthy.”

REALITY: The House Republican budget keeps revenue within its historical range of 18-19 percent of GDP. The President’s distortion is based on the fact that our budget prevents $1 trillion in tax increases. Many Democrats have claimed that our plan includes huge new tax cuts for the rich. This is completely false. Our plan calls for revenue-neutral tax reform along the lines of what the President’s Fiscal Commission proposed – lower rates with a broader base.  The President appeared to have endorsed this idea in his speech, but he also called for higher rates. Despite this contradiction on tax policy, the President was clear in his intent to raise taxes again on job creators and American families. 

Deficit reduction

CLAIM: “Today, I’m proposing a more balanced approach to achieve $4 trillion in deficit reduction over twelve years.  It’s an approach that borrows from the recommendations of the bipartisan Fiscal Commission I appointed last year, and builds on the roughly $1 trillion in deficit reduction I already proposed in my 2012 budget.  It’s an approach that puts every kind of spending on the table, but one that protects the middle-class, our promise to seniors, and our investments in the future.”

REALITY: The President’s plan lacks credibility. For one thing, is simply does not put “every kind of spending on the table” – the President ruled out changes to Social Security and exempted 90 percent of all federal spending from his debt-reduction “failsafe.”  For another, the President’s use of a 12-year budget window is bizarre – it is clearly contrived to make the President’s proposal appear to come close to matching the House Republicans’ proposal in terms of deficit reduction, when it actually falls a full trillion dollars short.

Conclusion

The President had an opportunity to reach across the aisle and work with Republicans by putting serious deficit-reduction ideas on the table. Instead, he decided to use this opportunity to kick off his 2012 campaign. It is no wonder that a few days after the President’s speech, rating agency Standard and Poor’s downgraded the U.S. debt outlook to negative, expressing skepticism about the President’s approach and implying that his stated position would make it harder, not easier, for the two parties to reach agreement on a serious plan before the 2012 election.

House Republicans will be here if the President changes his mind and decides that the next generation is more important than the next election. Until then, we will continue to lead.

-Congressman Paul Ryan

Lack of faith in Americans

In addition to this misleading and demonstrably false description of Paul Ryan’s budget and the consequences of his own plan, there is a deeper problem with President Obama’s message, one that reveals a fundamental misunderstanding of American Exceptionalism.

The president pretends to speak in the language of hope, change, optimism and compassion.  Scratch the surface of his message, however, and you will see that it reveals a profound cynicism about the character of the nation he leads.

During his speech last week, and at subsequent campaign stops, the president said “The America I know is generous and compassionate” Yet, in describing the generosity and compassion of America, the president cites government programs instead of the countless acts of charity Americans engage in every day without the involvement of government. 

This is a profoundly different view of American compassion than the one experienced by most Americans.  Throughout our history, it has been through a strong a vibrant civil society – the actions of charities, churches, civic organizations and associations – that Americans have expressed their compassion, not through big government. 

In fact, the founding fathers believed that America’s strong volunteer ethic was essential to defend liberty because civil society fulfills roles that government is always tempted to assume.  This puts the big government programs that President Obama and liberals want to preserve and expand profoundly at odds withthe traditional American model of limited government and vibrant civil society.  As big government expands, civil society gets crowded out by taking more money and resources away from civil society and directs it towards government.  It also erodes the sense of personal responsibility Americans feel to take care of themselves and their neighbors by shifting that responsibility to government. 

This brings us back to the issue of compassion, which President Obama seems to be setting up to be the aspirational “hope and change” of the 2012 campaign. 

The president is trying to argue that Republican plans to reduce government spending reveal they do not believe in a compassionate America.  He is 180 degrees wrong. 

By placing their faith in government, not civil society, to help those Americans in need, it is President Obama and the left who defend and want to expand the big government welfare state who do not believe in a compassionate America.  

Rather than a compassionate American people, the left believes in compassionate politicians compensating for uncompassionate Americans by taking their money and spending it on what they consider more benevolent things. 

So when President Obama and the Left try to take the moral high ground and say that an America with less big government is not the compassionate America they know, remember it is because their view of the American people is not the same as what we know is true.

Your friend,

Newt

This Week in American Exceptionalism

April 22, 1864 – The US Congress passes the Coinage Act of 1864, which first authorizes the inscription of “In God We Trust” on US currency.  One of the reasons America is exceptional is because of the strong emphasis we place on the value of religious participation.  The founding fathers believed that because government was to be limited in order to preserve liberty, only a virtuous people would be able to exercise the level of self-control necessary to direct that freedom to constructive ends.  That is why George Washington said in his farewell address that “of all the dispositions and habits which lead to political prosperity, religion and morality are indispensible supports.” In the American tradition, our freedom truly is dependent on our trust in God.  That’s why this act which led to the inscription of “In God We Trust” on all US currency is another moment in American Exceptionalism. 

Newt’s Quick Links

•    Last night I participated in a Tax Day Tea Party Tele-Townhall with radio host Rusty Humphries to commemorate the third anniversary of the tea party protests.  During the call, I answered questions from activists around the country.  You can listen to the audio here.

•    At Renewing American Leadership, listen to a selection of “Garlow Perspectives”, one minute historical commentaries by ReAL’s Chairman, Dr. Jim Garlow. You can hear the podcasts here.


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