House Budget Chairman Paul Ryan (R-Wisconsin) said he is open to revenue increases as part of a deal to reduce the deficit today, seemingly shifting positions from the hardline opposition his party has maintained against revenue growth. Ryan said on Fox News Sunday that he would be open to a deal that containes $3 or $4 in spending cuts for every $1 in revenue increases if it came through a major reform of the tax code and was large enough. Host Chris Wallace asked if Ryan would be open such hypothetical deal if he were sitting on the joint super committee created by the deal to raise the debt ceiling. Ryan responded, “yes”:
WALLACE: If you were on that committee, and you get a deal — let's say $3 or $4 dollars in spending cuts and entitlement cuts for every $1 in revenue increases, and the revenue increases came from tax reform […] — would you be open minded to including some of that revenue as part of a debt deal?
RYAN: It all depends on the spending side of the ledger. … If we're convincingly restructuring these entitlement programs and getting that spending line down to meet that revenue line, then can you have higher revenue growth through more economic growth and tax reform? Yes, the answer is yes.
This willingness to consider revenue increases appears to be a significant shift in position for Ryan and the GOP, who have previously insisted that any tax reform be “revenue neutral,” ie offset every dollar in revenue increases with cuts to tax rates, ensuring no extra money flows into the Treasury. “Our budget calls for revenue neutral tax reform,” Ryan said on the Laura Ingraham show last month. “You keep people's tax rates high” if tax reform is not revenue neutral, he said. “We're not going to raise taxes in this committee — number one,” Ryan said on Fox News host Sean Hannity's show on Monday.
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During negotiations over raising the debt ceiling, President Obama proposed several comprehensive plans that would have cut up to $4 trillion in spending for modest revenue increases. Republicans refused every one. When he abandoned negotiations on July 22, Speaker John Boehner (R-Ohio) said the deal presented by Obama “was going to be nothing more than a tax hike on the American people.” That deal contained $3.5 trillion in spending cuts and about $1 trillion in revenue increases — exactly the ratio Wallace proposed today — and Republicans rejected it.
Now, however, it seems Ryan would be open to such a deal. While he didn't acknowledge shifting his position, the move comes just two days after S&P downgraded US debt for first time in history, placing much of the blame at the feet of Republicans for refusing to raise revenues.