Paul Ryan's Fiscal-Cliff Dilemma: Purity or Pragmatism?

As the GOP House budget guru looks to 2016 and his congressional future, both paths are fraught.

Eric Thayer/Reuters

Fresh from the campaign trail and mulling his options for the future, former vice-presidential candidate Paul Ryan will play a pivotal role in negotiations over the fiscal cliff and faces a choice of two paths.

The Wisconsin congressman, known for his zeal for budget cutting, could opt for ideological purity and emerge as a leading voice urging his fellow Republicans to resist tax increases and demand steep cuts in entitlement spending.

Or he could use his role as House Budget Committee chairman to push for the best deal possible for Republicans but then demonstrate bipartisanship by getting behind a compromise.

Either path holds perils for the Republican lawmaker, who became an instant focus of speculation as a potential 2016 White House contender following his failed vice-presidential bid. If he insists on too hard a line in the budget talks, he could potentially open a rift with other leaders in his party and get blamed for scuttling a deal. On the other hand, any compromise could leave Ryan open to criticism from the Republican base and vulnerable to a challenger from the right in 2016.

Republican strategist Steve Schmidt said Ryan has an incentive to work toward an agreement.

"The ability to show you've been practical, the ability to show that you've compromised, the ability to show that you have bent the negotiations in your direction and got the best deal that you can, all of those things position you better than pure ideology in the context of a presidential campaign," said Schmidt, a top adviser to John McCain's 2008 presidential campaign. "He has the ability to provide leadership in a situation like this and perhaps this will be his greatest test."

But Ryan's own history suggests that he would not cut any deal unless it went far enough toward his top priority: curbing spending on Medicare and other entitlements. When he served on the Simpson-Bowles deficit-reduction commission in 2010, he was one of seven on the 18-member panel who voted against the final proposal because he felt it didn't do enough to restructure Medicare and thought the proposed increase in tax revenue was too high. The proposal fell three votes short of the "supermajority" of 14 it would have needed to be sent to Congress for a vote.

In 2011, Ryan asked to be left off the supercommittee that was tasked with identifying further savings in the wake of a debt-ceiling agreement. He cited his own budget work and voiced doubts about how much the group could achieve. It did indeed fail, which is why lawmakers and the White House must now use the current lame-duck session of Congress to try to avert the $1.2 trillion in automatic budget cuts known as the sequester set to kick in at the start of next year.

This time, Ryan has more skin in the game. As a member of House leadership, he does not have the option of sitting out the fiscal cliff negotiations. In a change from the debt-ceiling talks, he has joined the daily Republican leadership meetings, alongside Ways and Means chairman Dave Camp, Committee on Energy and Commerce chairman Fred Upton. "Chairman Ryan is back here because he wants to solve these problems," said Boehner spokesman Brendan Buck.

House GOP staff, including Austin Smythe, the Budget Committee's staff director, huddled with White House aides on the Hill last week to begin talking about the broad concepts that will guide negotiations, though no dollar amounts have been set yet. After Thanksgiving, once concepts are nailed down, the principals can begin negotiating.

Ryan has publicly echoed House Speaker John Boehner in signaling openness to revenue increases but not higher tax rates, meaning he might support the closing of tax loopholes or other revenue-raising steps. He was privy to the wording that Boehner used in the public remarks on the fiscal cliff he delivered the day after the election.

"He opposes raising tax rates because doing so would stifle economic growth and cost jobs," said Conor Sweeney, a Ryan spokesman. He added that Ryan wants to see what the White House's opening argument will be and whether President Obama will "offer responsible solutions, identify specific spending cuts, and demonstrate leadership to tackle this pressing challenge."

Ryan will press "very, very hard" on long-term entitlement reform, said Bill Hoagland, a former aide to Senate Majority Leader Bill Frist, who has been in touch with Ryan's staff.

If Ryan can wring concessions from Democrats on entitlements, it could help his presidential ambitions. "If he's running in two or four years from now he'll be able to say [the deficit was reduced] because of my insistence on entitlement reform," said Hoagland, who is now a senior vice president at the Bipartisan Policy Center.

Republicans feel confident in pressing for long-term entitlement reform as part of "grand bargain" negotiations because polling on Medicare during the campaign suggested the issue was not a major liability for Ryan and Republican White House nominee Mitt Romney, despite a barrage of Democratic attacks zeroing in on the Wisconsin congressman's Medicare plan.

Eric Ueland, Frist's former chief of staff, said Republicans recognize that Ryan might have to cede some ground in the budget talks because Democrats hold a significant amount of leverage, given that they still control the Senate and that President Obama won his reelection bid. "What he does and what he's able to do is judged against the baseline," said Ueland, now a vice president at the Duberstein Group.

But Ryan's critics doubt Democrats will be able to negotiate with him. "Nothing we've seen so far under Chairman Ryan suggests that he's willing and or capable of negotiating bipartisan legislation. Hope springs eternal but I don't have a lot of it," said Jim Manley, a former aide to Senate Majority Leader Harry Reid who is now at QGA Public Affairs.

Instead of seeing his national stature enhanced, Manley said he hopes Ryan will become an "afterthought" in the negotiations if he refuses to make any concessions. Alternatively, he could complicate Boehner's ability to negotiate a deal by presenting a challenge from the right.

But Douglas Holtz-Eakin, a former Congressional Budget Office director, predicted Republican House lawmakers would present a united front. "This is not a case where the administration's going to divide and conquer," said Holtz-Eakin, president of the American Action Forum.

Anti-tax activist Grover Norquist disagreed with the notion that the congressman would feel pressure to water down his own principles in order to portray himself as a pragmatic dealmaker. "He will be both a man who can sell a plan to the rank and file and can sell a no vote to Boehner," said Norquist, president of Americans for Tax Reform.

Steven Smith, a political science professor at Washington University in St. Louis, wrote in an email that Ryan might emulate former Democratic Sen. Sam Nunn, a powerful voice on national security issues. In Ryan's case, he could take a hard line during negotiations and only offer his support for a Boehner-backed deal at the last minute. For Nunn, this offered the appearance that he was careful and principled. But, Smith warned, "This is not an easy path for a prospective presidential candidate."

"First, endorsing a moderate solution risks alienating the core of the party," he wrote, noting that it was unlikely Nunn could have won his party's nomination for president. "Second, a long-term deal may take budget issues off the agenda and reduce the advantage that Ryan has over the field of candidates. Unfortunately, the alternative path, playing to the right and standing in the way of a Boehner deal with Obama, is not likely to be popular with the general electorate."

For now, Ryan is keeping his cards close to the vest. Bill Kristol, editor of the Weekly Standard and a leader in the effort to get Ryan into presidential politics, professed no knowledge of Ryan's intentions.

"My strategy is to acknowledge Obama won, cut the best deal you can, and live to fight another day for big tax and entitlement reform," he wrote in an email.

As for Ryan's, people will have to wait and see.