Ryan Budget Plans Ignored as Lawmakers Craft Debt-Limit Deal

Oct. 16 (Bloomberg) -- U.S. Senate leaders are rushing to lock up an agreement to end the fiscal impasse, stepping in after House Republicans’ last-minute plan to avert a U.S. government default collapsed. Peter Cook reports on Bloomberg Television's "In The Loop." (Source: Bloomberg)

Representative Paul Ryan wanted big policy changes to lift the U.S. debt ceiling: a revamp of Social Security and Medicare, a framework for tax-code changes and approval of the $5.3 billion Keystone XL pipeline.

That’s all on hold now. Lawmakers are moving to adopt legislation to end the 16-day partial government shutdown and continue paying the nation’s bills. Ryan’s ideas for fixing the crisis weren’t included in a Senate compromise that will come up for votes today.

Instead, the Republican Party’s fiscal-policy leader and its 2012 vice presidential nominee will have to wait for budget negotiations in the coming weeks that are envisioned in an emerging Senate agreement to end the current impasse.

Ryan, who leads the Budget Committee, said today he’d keep pushing for changes to entitlement programs and “pro-growth policies that create jobs” as part of a budget deal. “Nothing has changed from my perspective,” the eight-term Wisconsin congressman told reporters.

His limited role in the immediate talks risks diminishing his credentials before 2016, when Ryan could be a White House contender, said Julian Zelizer, a professor of public affairs and history at Princeton University in New Jersey.

“There was a moment in recent days where it seemed like he would try to emerge in the spotlight, to help be the driver. But it didn’t happen,” Zelizer said. “He’s not a key figure.”

Bipartisan Agreement

The bipartisan Senate agreement, negotiated by Majority Leader Harry Reid, a Nevada Democrat, and Minority Leader Mitch McConnell, a Kentucky Republican, would suspend the U.S. debt limit until Feb. 7. It also would end the shutdown, funding the government through Jan. 15 at Republican-backed levels under automatic spending cuts called sequestration.

The agreement concluded a four-week standoff that began with Republicans demanding a defunding of President Barack Obama’s 2010 health-care law as a condition for suspending the borrowing limit and keeping the government open.

Ryan laid down a fiscal marker on Oct. 8, calling for changes to Social Security and Medicare, including higher premiums for the health system for the elderly; a requirement that federal workers provide more for their retirement; and an agreement to move ahead with tax-code revisions to broaden the taxpayer base and lower rates.

‘Our Moment’

“We need to pay our bills today -- and make sure we can pay our bills tomorrow,” Ryan said in an essay published by the Wall Street Journal. “Let’s negotiate an agreement to make modest reforms to entitlement programs and the tax code. This is our moment to get a down payment on the debt and boost the economy.”

House Republicans in September planned to include many of Ryan’s ideas in a debt-limit measure. Instead, they echoed demands championed by Senator Ted Cruz, a Texas Republican and favorite of the anti-tax Tea Party movement, to strip funds from the 2010 Patient Protection and Affordable Care Act, Obama’s signature domestic achievement.

The effort to defund the health-care law, immediately denounced by Obama and Democrats, marked a shift after two years of brinkmanship in which Republicans sought deep domestic spending cuts in exchange for debt-ceiling increases and continued funding of the government.

Ryan, during a closed meeting of House Republicans yesterday morning, urged members “to move forward,” said one of his caucus colleagues, Devin Nunes of California.

‘Confused Matters’

By pushing his ideas, Ryan, 43, achieved little and complicated the shutdown end game by setting out different Republican demands, said Ross Baker, a political science professor at Rutgers University in New Brunswick, New Jersey.

“He’s confused matters, and it doesn’t really help at all,” Baker said.

Ryan, through a spokesman, declined to be interviewed on whether he missed a chance to help broker a resolution to the standoff.

“Chairman Ryan remains focused on getting a budget agreement,” said his spokesman, Kevin Siefert. “He hopes all sides can work together to pay down the debt and grow the economy.”

Ryan in the past pushed for deep tax cuts and a plan to partially turn Medicare into a voucher system for future recipients. At the same time, he has been willing to part ways with his party’s leaders, supporting an eventual pathway to citizenship for undocumented immigrants.

Low Profile

After keeping a low public profile when the government shutdown began Oct. 1, Ryan spoke on Oct. 9 about his budget ideas to the Republican Study Committee, a caucus favoring spending cuts and other limits on government. The next day he participated in a White House meeting between Obama and congressional leaders.

Reid, announcing the Senate agreement this morning, said the legislation instructs leaders to name conferees to a budget conference committee “that will set our country on a long-term path to fiscal sustainability.”

That conference may give Ryan a second chance to seize the policy agenda. His leadership of the House budget panel puts him in position to seek the type of spending cuts and tax-code changes Republicans have pushed for since taking control of the House in 2011.

“We’re hoping he’ll get into the broader policies in the budget negotiations later this year,” said Representative Joseph Pitts, a Pennsylvania Republican. “I have the highest regard for him.”

It also could be the ultimate test for Ryan, Zelizer said. While he’s long been one of the boldest thinkers in his party, Ryan may need to show results to reap political gains, he said.

“He’s been full of ideas over the years, but he hasn’t been successful as a legislator,” Zelizer said. “The conference could be another failure.”

To contact the reporter on this story: Laura Litvan in Washington at llitvan@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

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