The Third Rail Referendum

I sat down Friday night to write my own recommendation for who Mitt Romney should choose as his vice-presidential running mate. But it was quite late and I was tired, so I put off the task for the weekend—and thus I was saved from writing the most instantaneously irrelevant column ever.

Early Saturday morning, days earlier than most of us expected, Mitt Romney announced that he has chosen Wisconsin Congressman Paul Ryan. It is, to everyone’s even greater surprise, a bold choice and one that raises the stakes of the election even higher. It is a bold and confident choice because it means that Romney is not just asking voters to judge Obama’s presidency as a failure. He is asking them to give him a mandate for a basic reform of the middle-class welfare state.

Think of this election as the third rail referendum.

Ryan made his name as the top Republican on the House Budget Committee, where he set out singlehandedly to rally Republicans around the goal of limiting spending on the big middle-class entitlements, Social Security and Medicare. The basic principle he has embraced is to shift from a system of “defined benefits,” where the federal government promises to provide you with certain goodies or a certain standard of living, no matter how much it costs, to a system of “defined contributions,” where the federal government promises subsidies up to a certain dollar amount—and no farther. For example, the proposal that made Ryan famous is a plan to replace traditional Medicare with a system of vouchers that the elderly can use to purchase subsidized health insurance.

The virtue of this system, from a budgetary perspective, is simple: it can be budgeted. Because the government’s commitment is specifically defined rather than open-ended—in other words, taxpayers would no longer be on the hook to pay whatever it costs to subsidize other people’s health care—spending can be predicted, controlled, and limited. Entitlements won’t yawn open to swallow the entire federal budget, as they are doing now.

For fully principled advocates of limited government, Ryan’s plan is not the ideal. We think government shouldn’t be in the business of handing out any kind of welfare, bailouts, or subsidies, whereas he wants to limit the welfare state in order to save it. But his reforms are still a very significant step in the direction of limited government. The Ryan plan occupies a sort of middle ground between extremes, between the unlimited, all-encompassing welfare state advocated by the left and the strictly limited government advocated by us laissez-faire free marketers. Call it a limited welfare state.

We will have another two and a half months to debate the merits of this reform plan, but the big news from the weekend is that we will be debating it, in exhaustive detail, because with Ryan on the ticket, this is what the election is going to be about.

There are reports that Romney chose Ryan partly because the two men have good personal chemistry. As some have observed, Ryan is exactly the type of person—young, energetic, wonkish, and detail-oriented—that Romney would have hired at Bain Capital. And Romney has already backed the Ryan plan, not pinning himself down too concretely on the specifics, but openly supporting it in its general principles.

But in picking Ryan, Romney must know that he is putting entitlement reform at the center of this election.

That certainly raises my opinion of Romney. Given his history as a moderate who flipped back and forth on key issues, I had assumed that his only goal was simply to be president. But if that were true, he would have made a more cautious choice of running mate. He would have picked someone who can help him in a big state and with a big demographic, someone liked by the conservative wing of his party but charismatic enough to appeal to swing voters, yet someone who was not too controversial. In short, he would have chosen Marco Rubio. There’s nothing wrong with that, and it’s what I would have advised him to do. But in choosing Ryan, Romney is making a point of showing us that he doesn’t want to get elected just to sit behind the big desk in the Oval Office. He wants to get elected so he can do something important.

He is also showing us that he is ready to take a risk. For as long as I can remember—and I am about the same age as Ryan—the middle-class entitlements have been regarded with fear and awe as the “third rail” of American politics. As with the electrified rail on commuter train lines, the rule was “touch it and you die.” Paul Ryan is the man who set out to defuse the third rail. In retrospect, the most important article of the past few weeks is Ryan Lizza’s recounting of how Ryan began his campaign for reform, how he won over congressional Republicans to embrace entitlement reform and ignore the party’s timid naysayers, and how he set out to make sure these reforms would be on the agenda in this election, no matter who the Republicans nominated. In the process, he has demonstrated that you can grab the third rail with both hands and you won’t die. In fact, you will get nominated for vice-president. What remains to be seen is whether you end up in the Oval Office.

The odd irony of this choice is that both the right and the left are happy with it. The right is happy that Romney chose a candidate who commits him to a real agenda for smaller government. The left is happy because they think the Third Rail still has some juice. They think all they need to do is to turn up the voltage and fry the whole Republican ticket to a crisp.

I think they shouldn’t be so complacent. Ryan has already pushed the debate on entitlement reform farther than anyone expected. The key turning point, in my view, came early last year, when the House Leadership officially backed Ryan’s plan, while President Obama submitted a budget that conspicuously ignored the whole issue—and Obama was the one who was more widely criticized. He was criticized because it is clear that entitlements are headed toward a fiscal crisis, and Obama has no plan to deal with it.

He still doesn’t have a plan, and that gives the Romney-Ryan ticket an advantage. When they are criticized for backing Ryan’s plan, they can ask: where is the president’s plan? Or they can ask: where is the Senate’s budget? They can portray the Democrats as being reckless for failing to have a plan and a budget to show how they can sustain all of the welfare-state promises they have made.

The Democrats face an even deeper problem. Maybe having Ryan on the ticket will make it easier for the Democrats to win—but it makes things much worse for them if they lose. If the Romney-Ryan ticket makes it into the Oval Office, they will arrive with a mandate to reverse the growth of the middle-class welfare state, heralding a long-term reduction in dependence on government and the size of government spending. And if the economy rebounds sharply by the middle of 2014 (which I regard as likely) Romney and Ryan could claim vindication in the same way that Reagan policies were vindicated by the economic growth of the 1980s. So maybe in 2016, Romney and Ryan will be the ones running ads proclaiming, “It’s morning again in America.”

Sure, Ryan provides a seemingly easy target. Then again, he has proven quite able to defend his ideas in public debate—I can vividly imagine how he will look in the vice-presidential debate, with Joe Biden as his foil. And if the Romney-Ryan ticket wins, the implications for Democrats are catastrophic.

In my obsolete column on Romney’s vice-presidential choice, the one big piece of advice I was going to offer was that he should make his choice with the future in mind. He should choose someone, not just to help him win the campaign, but to help him govern, and not just someone who can help him govern next year, but someone who can, if things go well, provide the Republican Party with vision and leadership eight years from now.

Romney has done more than that. He has given the party an idea and an agenda to define itself for the next few decades. And he has put that idea up to the American people for a referendum.

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2 Responses to The Third Rail Referendum

  1. dymphna August 12, 2012 at 8:22 PM #

    I am forced to budget my money and time for reading materials carefully. Sometimes I make mistakes – e.g., getting an online subscription to WSJ because I seemed to be missing important commentary. But I’m so inundated with their junk I can’t cope. I’ll have to walk that one all the way back.

    But I’ve never doubted my subscription here…except the online mag was a maze I never mastered.So instead, I learned to save the essays in a folder for later re-reading.

    Thus you can imagine my pleasure in seeing this new format. It has URLS! I can direct my readers easily to your ideas.

    As for Ryan, he was my hope. I will have to investigate for myself more fully his ideas and the foundations of his economic philosophical thinking.

    Allready the smears are startring. Some fellow from his highschool says he was voted Class Brownnoser. Other major moral failings will be revealed over the coming month – all with that same high school resentment and lack of gravitas.

    There is no doubt this will be ugly. Obama fights in close and personal. His loathing of Ryan ws already palpable. During his previous campaigns he operated by destroying the characater – whenever possible – of his opponent. This will be no exception.

    I am so grateful Christie is not the choice, whether it was he refusing the position or Romney choosing elsewhere. What started with Christie seeming to posess a refreshing candor has long since devolved to mean-spirited bullying of those with whom he disagrees. It would be a painful spectacle.

    What cheers me – beyond the immediate campaign – is how deep the bench of young turk conservatives we have waiting to get into play and meanwhile occupying (to coin a phrase) themselves with useful endeavors. Meanwhile, I can’t think of many up-and-coming Democrats who have anything new to say or anything positive to add to the public dialogue.

    Their approach has jumped the shark, but inside the echo chamber they may not be able to hear the splash. People grow weary of attacks and smears and we’ve had at least six years of it.

    And it’s not just the politicians. The Church Militant MSM don’t seem to be able to help themselves anymore.

    Interesting thing about the R/R team: both traditionally religious, both with track records (though watch the MMSM trash Ryan as a lightweight), both seemingly NORMAL and competent. I will disagree with some rhetoric, but I don’t care as long as it remains rhetoric – e.g., their seeming sympathy toward stronger gun control.

    But enough detail from me. I look forward to your essays in the coming months.

  2. marcaurel August 13, 2012 at 3:52 PM #

    Should the Romney-Ryan team win and implement Ryan’s Medicare-reform policy, it will be done in the name of ‘saving’ Medicare. As to the question of whether or not forcible redistribution of wealth within the altruist moral framework is right, well, this question is just too ‘extreme’ – and hence grabbing the real third rail, the ethics of self-sacrifice, is once again avoided.