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Long before he became one of the right’s most vocal critics of the idea that government spending could help boost the flagging economy, Rep. Paul Ryan offered a forceful, full-throated defense of stimulus spending — when then-President George W. Bush wanted it in 2002.
Ryan has denounced the 2009 Recovery Act signed by President Obama as “a wasteful spending spree” and “failed neo-Keynesian experiment,” and – as The Huffington Post pointed out this morning — dismissed as “sugar-high economics” the idea that government spending, through measures like payroll tax cuts and unemployment benefits, can help shore up a faltering economy.
But in 2002, when then-President Bush was seeking a roughly $120 billion package of tax cuts, tax incentives for business and unemployment benefits to jump-start the economy, Ryan offered a vigorous defense of the plan. “What we're trying to accomplish today with the passage of this third stimulus package is to create jobs and help the unemployed,” Ryan said in video that aired today on Up w/ Chris Hayes. The remarks came during a House debate on the measure on Feb. 14, 2002.
Ryan’s comments reveal a strikingly different economic analysis than the one he has become known for in recent years as the “intellectual leader” of the Republican Party and, now, Mitt Romney’s running mate. In 2002, Ryan argued that unemployment would remain at elevated levels even after the economy began to recover, and that aggressive stimulus would be a necessary and effective antidote.
“What we're trying to accomplish here is the recognition of the fact that in recessions, unemployment lags on well after a recovery has taken place,” Ryan said at the time. “We have a lot of laid-off workers, and more layoffs are occurring. And we know, as a historical fact, that even if our economy begins to slowly recover, unemployment is going to linger on and on well after that recovery takes place.”
Ryan’s advocacy of stimulus spending wasn’t limited to Washington, either. When he returned home to face constituents, he used similar language to make the case for the Bush stimulus bill. “You have to spend a little to grow a little,” Ryan told constituents at a town hall in Wisconsin in January 2002, according to the Journal-Times, a local newspaper. “What we're trying to do is stimulate that part of the economy that's on its back."
And as New York Magazine’s Jonathan Chait pointed out this morning, Ryan made the case for Keynesian stimulus in the form of income tax cuts in 2001, arguing for tax cuts that were “fast, deeper, retroactive to January 1st, to make sure we get a good punch into the economy, juice the economy to make sure that we can avoid a hard landing.”
Republicans have also repeatedly mocked calls by congressional Democrats to include renewed economic stimulus spending, such as a payroll tax holiday, as part of plans to reduce the deficit. Democrats have argued that short-term stimulus spending would help produce long-term revenue by boosting economic growth. Ryan has criticized that thinking, but in his 2002 remarks, he made exactly the same case: that short-term stimulus spending would produce budget surpluses.
“We've got to get the engine of economic growth growing again, because we now know because of recession, we don't have the revenues that we wanted to, we don't have the revenues we need, to fix Medicare, to fix Social Security. To fix these issues we've got to get Americans back to work,” Ryan said. “Then the surpluses come back, then the jobs come back. That is the constructive answer we're trying to accomplish here on, yes, a bipartisan basis.”
Ryan also argued in 2002 for helping workers pay for their health insurance and extending unemployment benefits. Since Obama has been in office, Ryan has voted against extending unemployment insurance.
“It's more than just giving someone an unemployment check,” Ryan said of the Bush stimulus bill. “It's also helping those people with their health insurance while they've lost their jobs and more important than just that unemployment check, it's to do what we can to give people a paycheck.”
Ryan called such measures “time-tested, proven, bipartisan solutions to get businesses to stop laying off people, to hire people back, and to help those people who have lost their jobs,” and urged congressional Democrats to break ranks and join Republicans in supporting the president’s plan.
“I've just recently read in our local Capitol Hill newspaper that members from the majority party in the other body want stimulus. They're breaking with their party leadership and asking for stimulus legislation to pass because in their home states they have a lot of people who are losing their jobs,” Ryan said. “I urge members to drop the demagoguery and to pass this bill to help us work together to get the American people back to work and help those people who've lost their jobs.”
:: Sal Gentile is segment & digital producer for Up w/ Chris Hayes. Follow him on Twitter at @salgentile. ::