Congressman Paul Ryan on Tax Cuts, Budget, and the Economy

Congressman Paul Ryan joined CNBC's Maria Bartiromo on the "Closing Bell" to discuss the tax-cut package, budget priorities, and deficit-cutting measures in the new Congress. Ryan, the incoming chairman of the House Budget Committee, emphasized the need for pro-growth tax reform and highlighted his concerns with the overall package.

Key Takeaways:

• Congressman Ryan believes that extending tax cuts is essential to preventing job destruction and promoting economic growth. He acknowledges that a permanent extension would provide more certainty in the marketplace, but given the current political circumstances, a two-year extension is the best deal they can get.
• Ryan expresses concerns about the payroll tax holiday, which he believes has been tried before and failed to stimulate demand. He also criticizes the UI extension, which he says is unpaid for and represents more deficit spending.
• The congressman supports reducing tax rates to promote economic growth and international competitiveness. He advocates for a flat tax and rejects the idea of raising tax rates.
• Ryan emphasizes the need to balance the budget through spending cuts, entitlement reforms, and economic growth. He believes that raising tax rates would hurt the economy and harm efforts to control the deficit.
• The congressman suggests that the Federal Reserve, which has been bailing out fiscal policy, should focus on price stability and stop trying to bail out the government.
• Ryan believes that Speaker Nancy Pelosi has the power to prevent the tax-cut package from coming to the floor for a vote, but he thinks it will ultimately pass.
• The congressman outlines his vision for the Budget Committee under his leadership, which includes promoting lower tax rates, real spending cuts, real spending controls, budget process reforms, and entitlement reforms.

Statistics:

• The tax-cut package extends tax cuts for two years, improving the death tax and setting a 35 percent rate and $5 million threshold.
• The payroll tax holiday only adds more uncertainty and will not stimulate demand.
• The UI extension is unpaid for and represents more deficit spending.
• The current tax rates are due to expire at the end of the month, and Ryan believes that allowing them to do so would harm the economy.
• The budget deficit has been growing, and Ryan emphasizes the need to balance the budget through spending cuts, entitlement reforms, and economic growth.

Sources:

• CNBC's "Closing Bell" with Maria Bartiromo, featuring Congressman Paul Ryan (Rep., R-WI)
• Federal News Service, Inc. (2010) Transcript of Congressman Paul Ryan on CNBC's "Closing Bell"