Paul Ryan Schools Chris Matthews on Tax Hikes, Budgets and Economics 101

Chris Matthews on Monday got a much-needed lesson from Rep. Paul Ryan (R-Wisc.) on how tax hikes impact the budget as well as the economy.

"Congressman Ryan, is there any tax role for reducing our $1.4 trillion to $1.7 trillion debt this year -- deficit this year?" Matthews asked during the 5PM installment of MSNBC's "Hardball." "Is there any role in tax increasing to help do that job?"

When Ryan gave an answer Matthews didn't like, the host arrogantly responded, "So, you won`t cut -- you won`t raise taxes and you won`t cut spending...All this bitching about the deficit doesn`t mean squat, because you won`t do either, raise taxes or reduce spending."

With the ball nicely teed up, Ryan unleashed a drive down the middle of the fairway that would make Tiger Woods proud (video follows with transcript and commentary, h/t Twitter's @LFRGary):  

CHRIS MATTHEWS, HOST: Congressman Ryan, is there any tax role for reducing our $1.4 trillion to $1.7 trillion debt this year -- deficit this year? Is there any role in tax increasing to help do that job?

REP. PAUL RYAN (R), WISCONSIN: I don`t think it`s a good idea, especially when we`re trying to come out of a jobless recovery in a slow- growth economy.

Look, we have got unemployment at almost 10 percent. The last thing we should be doing is raising taxes on the economy. Look, the worst thing for deficit reduction is a slow economy. You hit small businesses with these kinds of tax rate increases and you will slow down the economy further.

Look, 75 percent of those who will get hit with these higher tax rates are successful small businesses. Tens of millions of our jobs come from these small businesses. Now, if you try to blame these tax cuts and the wars for all of our fiscal problems, the numbers just don`t add up.

At best, 14 percent of the evaporation of the surplus came from these tax cuts. It all came from other circumstances: spending, economic growth declining, 9/11, all these other things.


RYAN: So, I think what Joe earlier said is right, which is these taxes will go up. And I think that`s a mistake. And I think it`s going to hurt the economy.

MATTHEWS: Well, let me ask you one question as a follow-up.

It seems to me every Republican that goes on "Meet the Press" lately is asked, where will you cut? They say nothing. They will not mention any cuts.


RYAN: Chris...

MATTHEWS: No, I have had Congressman Pence on, who won`t say any cuts.


MATTHEWS: So, you won`t cut -- you won`t raise taxes and you won`t cut spending.

RYAN: Chris...

MATTHEWS: So, in other words, all this bitching about the deficit doesn`t mean squat, because you won`t do either, raise taxes or reduce spending.

RYAN: Let me answer it, then.

MATTHEWS: Neither one.

RYAN: This year, Congress isn`t even doing a budget, but, last year, when we did a budget, I brought a budget to the floor that specifically cut $4.8 trillion of spending out of the budget and paid for all of these tax cuts and debt reduction. Two months ago, we put out $1.3 trillion in very specifically listed and enumerated spending cuts. So, I can go on with you on cuts. I can show you all the kinds of cuts.

Good answer, right? Here was Matthews' astonishingly addle-minded response: 

MATTHEWS: But that`s one-three hundredth (ph) of the deficit. That`s 0.3 of 1 percent you`ve talked about.

One-three hundredth of the deficit? $1.3 TRILLION?

The lesson continued: 

RYAN: Four-point-eight trillion dollars is not .3 of 1 percent of the deficit.

MATTHEWS: OK, 4.8 trillion. OK.

RYAN: And 1.3 trillion is not peanuts.


RYAN: It`s nothing to sneeze at.

MATTHEWS: OK. Let me go.


RYAN: Two things --

From here it became obvious what Matthews was up to. He's not interested in balancing the budget. He's certainly not interested in cutting spending.

What he's interested in is getting Republicans to say what programs they want cut so that Democrats can use that against them in the upcoming elections.

Ryan saw through the charade: 

MATTHEWS: I just don`t see -- I just don`t see any program cuts. You`re talking in general terms, but let me tell you this: the major Republicans that come on television will not cut Social Security, Medicare, and Medicaid. They won`t cut the military. They can`t cut debt servicing. They won`t -- they won`t get rid of a major cost of government.

They`ll talk about, you know, let`s freeze discretionary spending or discretionary and domestic in some sort of generalized way. But they won`t get rid of government. They seem to like government. In fact, they love to talk against it.

RYAN: Go to and you will see a very comprehensive piece of legislation that the CBO has scored that`s actually paying off the debt --

Indeed, this Roadmap was released last week, but I digress: 


RYAN: -- with specific reforms to the entitlements you mentioned.

MATTHEWS: Name a major piece of the 1.4 trillion to 1.7 trillion. No, just take --


MATTHEWS: -- just take a chunk out that 1.4 trillion by getting rid of a big program or good expenditure that people now watching can understand.

Straightforward question. Now watch Ryan give a straightforward answer that Matthews will summarily brush aside like a fly in front of the camera: 

RYAN: I would rescind the unspent stimulus funds. I would rescind all the TARP funds that aren`t spent. I would do a federal hiring freeze and pay freeze for the rest of the year. And I would go back and cut discretionary spending back to `08 levels and freeze that spending going forward.

Now, you and I can get into a debate about Keynesian economics, whether it worked or didn`t. I don`t think it did. We increased domestic discretionary last year by 84 percent. I don`t think we should continue to build that kind of a base. Let`s go back and cut discretionary spending back to `08 levels.


RYAN: Rescind stimulus, rescind TARP and do a federal hiring and pay freeze. Those are just a few ideas that add up to $1.3 trillion right there.

Now, let's understand that at the beginning of this segment, Matthews asked Ryan how he plans on reducing our $1.4 to $1.7 trillion deficit. The Congressman just gave cuts to eliminate $1.3 trillion, and Matthews dismissed it totally: 

MATTHEWS: OK. Congressman Crowley, I still don`t see any cuts in entitlements there. But go ahead.

Cuts in entitlements? Matthews didn't ask Ryan to cut entitlements. Matthews asked him what he would cut to balance the budget and Ryan complied.

As such, Matthews was being completely dishonest. This wasn't about balancing the budget.

Matthews wants to get Republicans to say they'll cut Social Security and/or Medicare: 


PAUL: You asked me discretionary.

MATTHEWS: Congressman Crowley, let me ask you. What are the Democrats going to do about the deficit? Anything?

REP. JOSEPH CROWLEY (D-NY), WAYS & MEANS CMTE.: Well, I did notice there, though, Chris, was he didn`t mention at all his plan to privatize Social Security. Again, going back to the same old Bush agenda, the failed Bush agenda, the American people rejected in the election of Barack Obama and the Democratic majority in the House and the Senate.

(INAUDIBLE) as it may, I think Democrats have really taken steps to be more responsible. We`re working under a PAYGO system, pay as you go. And albeit there are some items that are cut off from that portion of it, we are attempting to get back a system that was proven to get our budgets in order to really -- under the Clinton administration --


CROWLEY: -- really just -- really bring back more fiscally responsible Congress, more responsible government. It has worked in the past. Chris, I think it will work in the future. The president has said he wants to cut this deficit in half and I want to help him do that.

MATTHEWS: OK. Let`s get back to the bottom line. Are you comfortable going to the voters, Congressman Crowley, with a proposal to eliminate the $250,000 and above tax cut?

CROWLEY: I could tell you, Chris, in my district, there are very few people who make more than that money (INAUDIBLE) just a gross income of $250,000 or more. And I think, to live in the greatest country, as I said before, the world has ever known, it`s a small price to pay.

MATTHEWS: Let me ask you, Congressman Ryan -- you have no problems defending tax cuts for people who make over a quarter a million a year?

RYAN: Small businesses -- go to Wisconsin.


Now watch Matthews either demonstrate staggering ignorance or shameful dishonesty: 

MATTHEWS: No, no, individuals. It`s an individual tax cut.

And small businesses are owned by WHOM, Mr. Matthews? The lesson continued: 

RYAN: No, no. You have to understand, Chris, 75 percent of those people who pay that tax rate are small businesses who file as individuals, not corporations. That`s the problem with this economic argument, Chris, is when you think you`re just taxing rich people like Bill Gates, what you`re end up doing is you`re hitting successful small businesses. When we tax our employers more than our foreign competitors tax theirs, they get our jobs and we lose in global competition.

So, we ought to be keeping our eye in economic growth and job creation, what`s necessary to do, and that means low tax rates on businesses and small businesses in certainty. We have a whole new tax on certainty that`s hurting economic growth. We need to give taxpayers certainty that they`re not going to have a huge wave of tax increases in 2011 and then another in 2013.


RYAN: I would argue that`s depressing economic growth and costing us jobs.

Clearly not listening, Matthews went for another gotcha question: 

MATTHEWS: So, when the debt commission comes back this fall, and as a two-to-one cut in spending and a $1 increase in taxes, you`ll oppose it?

RYAN: I`m a member of the debt commission. I`m working, my colleagues --



MATTHEWS: If the proposal is for $2 in spending cuts, and $1 tax increase, you`re going to oppose the majority position on that?

RYAN: I don`t think it`s good form to do table talk, what`s on the table or off the table in the debt commission. I`m hoping we could put a really good dent on the problem.

MATTHEWS: OK. Well, I`m with you with that.

Thank you, U.S. Congressman Joe Crowley of New York --

CROWLEY: Thanks, Chris.

MATTHEWS: -- and Paul Ryan of Wisconsin.

Unfortunately, Matthews' behavior here was indicative of virtually all on the left in our nation today, especially those in the media.

The Republicans have been offering budget-cutting plans since this Congress was sworn in, but the majority Party in power continually refuse to listen to any of their suggestions.

Like a dutiful foot-soldier, Matthews continues to tell his tiny audience that the GOP is just saying no to obstruct everything his Party wants to enact.

As Ryan marvelously demonstrated Monday, nothing could be further from the truth?

Bravo, Congressman. Bravo! 

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