Rep. Paul Ryan (R-WI), ranking member of the Budget Committee and incoming chairman if Republicans capture the House in November, has a budget plan called “America’s Roadmap,” which slashes Medicare and Social Security in an ostensible effort to end the budget deficit. While right-wing pundits have been quick to applaud the plan, elected Republicans and those hoping to be elected are much more hesitant to endorse deep cuts to popular social programs. Many have shied away from endorsing the plan.
One such politician was former Speaker of the House Newt Gingrich (R), who dubbed Rep. Ryan “extraordinarily formidable” but had not explicitly endorsed his plan. But yesterday at an event in Iowa that was widely seen as laying the groundwork for a 2012 presidential run, Gingrich explicitly endorsed Ryan’s plans for Social Security, while voicing disapproval for the taxes contained in the roadmap:
Taking questions after his talk, Gingrich told The Tribune that Wisconsin U.S. Rep. Paul Ryan is “one of the smartest conservative thinkers in Congress,” but that he opposes a value-added tax proposed by Ryan as part of a plan to end the U.S. deficit.
Gingrich also said he believes that Ryan’s plan to partly privatize Social Security would “triple the earnings” of future retirees.
Gingrich may “believe” that Social Security privatization would triple retirees’ benefits, but it is not a belief based in fact. The Center for Economic and Policy Research studied President George W. Bush’s proposal to privatize Social Security — a plan that the Ryan roadmap closely resembles — and found that a 15-year-old entering the system would see a benefit cut of 45 percent by the time they were of retirement age, which would mean a loss of about $200,000 in retirement benefits. Private accounts would only replace about $9,000 of the lost benefits, according to CEPR — and that’s assuming the individual doesn’t retire in an economic slump.
As a Center for American Progress Action Fund analysis found, under a Bush-style privatization plan, an October 2008 retiree would have lost $26,000 in that year’s market turmoil. Gingrich’s support for privatization is notable because it belies the claim made by many conservative pundits that no Republican wants to privatize Social Security.
Also, Gingrich’s specific disapproval of the value-added tax plan undermines his stated goal to balance the budget — something the Ryan plan already fails to do. The Center for Budget and Policy Priorities says that the Ryan budget would not balance the budget nor seriously reduce the national debt, and that’s taking into account the revenues raised by value-added taxes. Gingrich’s specific disapproval of those taxes would move the Ryan “roadmap” even further away from accomplishing that goal.