A budget-hawk congressman who has spent virtually his entire career in Washington is now the GOP standard-bearer for fiscal conservatism. What would that mean for your business?
It's rare that both Democrats and Republicans each seem truly convinced that circumstances are so perfectly set up for them to win politically.
That's what's happening now with the selection of U.S. Representative Paul Ryan from Wisconsin as Mitt Romney's running mate. Conservatives are breathing a sigh of relief that Romney picked someone they see as a true believer. Democrats can't believe their luck, for pretty much the same reason.
But what about you, as an entrepreneur? What would Ryan--or his policy proposals--mean for small business in America?Here's what we've learned so far.
He's not an entrepreneur. He's a creature of Washington.
True, Ryan has a deserved reputation as a budget hawk conservative. He cites Ayn Rand as the first inspiration for his decision to go into public life. It's hard to come up with a model for a more laissez-faire, go-it-your-own ideology than Rand's.
And, Ryan's time in Washington has been defined by ideology, not pragmatism. He eventually gave up on Congressional earmarks for his Wisconsin district, and he is the author of only two bills that became law during his 14 years in Congress. One of his bills named a post office; the other changed the way arrows (yep, as in bows and arrows) are taxed.
Still, Ryan is as much a career politician as anyone who's ever run for such a high office, as he's almost never had a paycheck that wasn't drawn on the U.S. Treasury. Ryan's youth was marked by tragedy after his father's death when he was just 16, and the future Congressman funded his bachelor's degree with the Social Security benefits he received as a result.
Fresh out of college in 1992, Ryan came to Washington immediately. He worked as a Capitol Hill staffer and moonlighted as a waiter and fitness trainer. He spent some time working at a private foundation as former Vice-Presidential candidate Jack Kemp's speechwriter, and spent a "resume padding" year as a marketing consultant for his family's construction firm in Wisconsin before running for Congress himself.
In fact, when you line up Ryan against his direct opponent, Vice President Joe Biden, you can see two versions of the same person--at least in that they both came to Washington in their 20s, were elected to office far younger than their peers, and never left.
He might increase the caliber of the debate.
In Washington, anyway, people are excited to suggest that selecting Ryan means we're in store for a much more policy-oriented, big-picture, ideological argument through November.
Ryan is best-known as the author of the Republican "Path to Prosperity" budget plan--iterations of which he has produced on a yearly basis, garnering more support each time. Described by conservative columnist Charles Krauthammer as, perhaps, "the most annotated suicide note in history," for its thoroughness and 37 footnotes, it pretty much guarantees a debate over two visions for the role of government in America.
It'll be a sharp debate, for sure--for example, over the role of Medicare. Ryan's budget plan would eventually eliminate Medicare as we now know it, replacing the popular defined benefit plan with a voucher program for future seniors to buy private health insurance, starting in 2023.
The same kind of far-reaching proposals can be found in Ryan's plans for Medicaid, and his broader idea to eliminate the capital gains tax. It's been pointed out elsewhere that if Ryan's proposals were enacted, Mitt Romney would have had an effective tax rate of less than 1% last year.
Policy? The jury is out for entrepreneurs.
First, it's almost impossible to imagine that a U.S. Congress and President whose ideological makeup looked even remotely like the current crop would seriously consider anything approaching Ryan's Path to Prosperity budget proposal.
That said, there are portions of it that can illuminate for us where Ryan stands on fiscal policy.
While in the budget Ryan mentions that he'd strip away regulatory bureaucracy that could ease the start of certain small businesses. But he voted against the Small Business Jobs Act, which some think increased contracting opportunities for the smallest businesses, and also increased the SBA's lending capacity.
As far as taxes go, Ryan proposes to pare the nation's tax code from the current six individual tax rates down to two. as for corporate taxes, the plan would lower them from 35 percent to 25 percent.
Plus, wealthy individuals might get a break. Ryan has long fought to lower capital gains taxes and proposed legislation to make the President Bush's lower capital gains tax (of 15%) permanent. The Washington Post report: "An analysis of Ryan’s proposal by the Tax Policy Center suggested it would give a $265,000 tax break on average to Americans earning more than $1 million each year."
Second, however, it's hard to imagine what Ryan governance would actually look like in practice. Ryan insists that his budget plan would be "revenue-neutral," and that the tax cuts he champions would be paid for by getting rid of other loopholes and subsidies.
The problem, of course, is that his proposal says nothing about which loopholes he'd close: The mortgage interest deduction, perhaps? Subsidized employer health insurance premiums? It's hard to project what the landscape would look like for entrepreneurs without these kinds of details.
Where do you stand?
As an entrepreneur, where you stand on Ryan likely depends on where you sit. If you think Obama's health care reform is a great development because it would free entrepreneurs from the need to keep "day jobs" because they need health insurance, you're probably not a fan. If you think a smaller government is a better one, then you're more likely in the Romney-Ryan camp.
But does picking Ryan change that for you, either way? It's hard for me to see how it would.
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