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What Paul Ryan learned from Jack Kemp

When Paul Ryan began ascending as a young congressman on the House Budget Committee, his old mentor, Jack Kemp, was concerned.

“Don’t go down that path, Paul!” Kemp warned him, according to economist Lawrence Hunter, a former Kemp aide.

Kemp was always proud of his protege, who began working for him in 1993, and he remained close with Ryan through the end of his life. Kemp died of cancer in 2009.

But after Ryan went to Capitol Hill, Kemp was also concerned that he would become overly fixated on spending and fiscal issues, according to some of his former staffers.

“When he saw Paul heading down the budget path, it caused him great concern that Paul had gotten bitten by the austerity bug,” said Hunter, formerly chief economist for Empower America, the think tank where Ryan worked as Kemp’s policy aide.

Kemp’s warnings had a friendly and avuncular tone, his colleagues recall. “He would chide Paul that while it was important to remember the spending side, it was more important to remember the growth side,” said Bill Dal Col, former president of Empower America. “Would he be harsh about it? No, it was not his nature.” But the policy differences were real.

Kemp, the former NFL-quarterback-turned-congressman from western New York, helped convince President Ronald Reagan early on that tax cuts drive growth. The tax cuts in Ryan’s recent budgets are a testament to Kemp’s legacy, which he cites to this day. In Wednesday’s speech at the Republican convention, Ryan described the critical influence of Kemp’s economic ideas, praising “his belief in the possibilities of free people, in the power of free enterprise and strong communities to overcome poverty and despair.” He concluded: “We need that same optimism right now.”

But Ryan and Kemp had diverged when it came to broader questions of spending and the budget. A self-proclaimed “bleeding-heart conservative,” Kemp thought that prioritizing austerity and balanced budgets was wrongheaded, and he pushed for special tax breaks to revitalize America’s inner cities.

Ryan, by contrast, has prided himself on being a deficit hawk unafraid to make tough cuts to rein in spending. Rather than singling out low-income Americans for help, he wants to scale back tax breaks while lowering rates for high- and low-income households alike.

So while Ryan has been cast as Kemp’s successor, his differences with his mentor have also helped make Mitt Romney’s running mate a hero to modern-day conservatives — and a villain to his liberal opponents.

A bond is formed

Ryan was only 23 when he became an aide to Kemp at Empower America. Kemp, then 57, was already well known as the GOP’s “happy warrior” for supply-side economics. Since his days as a House Republican, Kemp conveyed his pro-growth message with a sense of “endless optimism,” said economist Richard Rahn, a close friend of Kemp’s since the 1970s. “It was wonderful, euphoric rhetoric.”

Kemp was eager to bring that message to a bigger audience: He ran for president in 1988 before becoming George H.W. Bush’s housing secretary. After Democrat Bill Clinton’s 1992 victory, Kemp helped to launch Empower America in hopes of helping the GOP embrace a new policy agenda.

Ryan was quickly enlisted to help research and write the speeches, papers and op-eds that were Kemp’s bread and butter.

“Jack would say, ‘I’m thinking of giving a speech. Read this, this and this. Pull out of it what you want, and let’s go through it,’ ” said Dal Col. And his co-workers still remember the way he would summon Ryan into his office: He leaned back in his chair and yelled out the door, “Paul!”And Ryan would suddenly appear

Ryan was deferential at first. “Paul would do his homework — he was very, very cautious before he made a pronouncement and had stuff to back him up, because he knew Jack was going to challenge him,” Dal Col said. And it took him some time to use “Jack,” as his boss insisted, instead of “Mr. Kemp.”

But the two soon became close. Ryan was already familiar with the economic thinkers that influenced Kemp, reading Jude Wanniski’s “The Way the World Works” and George Gilder’s “Wealth and Poverty” as a 21-year-old Hill intern.

“Their bond was people and policy first. Politics second. In that sense, they were practically mirror images of each other,” said J.T. Taylor, a former Kemp aide.

Ryan left Empower in 1995, a year before GOP presidential nominee Bob Dole picked Kemp to be his running mate. But even after going to the Hill, Ryan never lost touch with his old mentor. “They talked very regularly. He’d call Jack, and Jack would call him,” Hunter said. “It was a community.”

Differences emerge

Like Kemp, Ryan landed on the presidential ticket in no small part because of his policy vision. And Kemp’s imprint on Ryan’s outlook has been clear since his early days in Congress. Soon after being elected, Ryan joined the Prosperity Caucus that promoted tax cuts as the key to growth. He vigorously lobbied for Bush’s tax cuts to be bigger. And his current budget reduces the top tax rate even more than Romney has proposed.

But Ryan’s differences with his mentor also became sharper as the years went on. For decades, Kemp had proudly aligned himself with the “anti-austerity” Republicans who thought both parties’ fixation with balancing the budget was to the nation’s detriment.

“Austerity and devaluation are the problem, not the solution. You can not enrich poor nations by impoverishing their people,” Kemp said in a 1995 speech. In 1998, he warned then-Speaker Newt Gingrich that the GOP’s growing “austerity corps” would eclipse their push for lower taxes.

“It’s not like he loved spending money,” said Hunter, citing Kemp’s support for school vouchers. “But he was convinced that if you adopted the austerity approach, you’d lose politically, and it wouldn’t work policy-wise.”

That’s why Kemp was initially so concerned when Ryan joined the House Budget Committee, which he saw as the natural breeding ground for fiscal hawks. “He would say to people like Paul, ‘Don’t confuse them. Don’t combine entitlement reform and spending cuts — the minute you do this, you lose,’ ” Hunter said.

Former colleagues say Kemp and Ryan never openly argued over budget issues, and they play down the differences between the two. “They were two different chapters out of the same book,” Dal Col said. “Paul would put more emphasis on spending controls.”

But Ryan’s commitment to reducing spending in the name of deficit reduction has been his calling card in Washington. He rejected the Bowles-Simpson debt reduction plan for failing to have sufficient Medicare cuts. In his latest budget, Ryan proposes to cut Medicaid spending by $1.4 trillion and reduce total spending by $5.3 trillion

Becoming a lightning rod

In fact, the very ways that Ryan has departed from Kemp — if only by a matter of degrees — have also made him a lightning rod in Washington. His strategy of combining major spending cuts with huge tax cuts has endeared him to conservatives, while liberals think he’s made a bad idea even worse.

“What the Empower America folks wanted to do is move beyond the green eyeshade, balance-the-budget message of traditional conservatism. They didn’t want to have simply a negative narrative about government,” said Will Marshall, who headed a similar policy shop for Clinton’s New Democrats.

Marshall also pointed out that Kemp went out of his way to advocate for new ways of helping low-income Americans. He proposed creating specially targeted business and income-tax breaks in designated “enterprise zones” of high poverty as an alternative to direct government handouts.

In 2004, Ryan did try to revive Kemp’s “enterprise zone” plan, proposing a bill that would let businesses and individuals deduct all capital gains, savings and investing-related expenditures in high-poverty areas.

Ryan has since abandoned such targeted proposals in favor of reforming the entire tax code. But his budget would also let the expansion of certain low-income tax breaks such as the Earned Income Tax Credit expire, whereas Kemp wanted to expand them.

Those close with Kemp chalk up the differences to a vastly changed political and fiscal landscape. “Jack would have much rather adjusted the entire tax code, but he knew legislatively that wasn’t possible,” Dal Col said. And they maintain that Ryan heralds the same message of uplift through free enterprise. “He got the point of Kemp, an expansive conservatism that would serve the nation,” said Bill Bennett, another co-founder of Empower.

A mutual understanding

And ultimately, Ryan may have tempered Kemp’s worldview as well.

Kemp was well loved for his boundless optimism, but even his fans admit that he occasionally veered on being Pollyannaish.

“On the spending side, [Kemp] was one who thought economic growth would take care of everything,” Rahn said. “A lot of us who were friends, part of the supply side group, were more skeptical. Paul is a realist. Jack — and I love Jack — he would go off on these things and you’d ask, ‘What planet is he coming from?’ ”

Kemp didn’t live long enough to see the full impact of George W. Bush, President Obama and the recession on the deficit. But Ryan’s own warnings may have already begun to take hold. “What Paul would try to convey to Jack in the later years is, ‘The trajectory on which we’re headed is unsustainable,’ ” Taylor said. “And I vividly remember Jack saying, ‘You know what? You’re right. And of course we need economic growth.’ ”'

Kemp, for his part, “absolutely liked being corrected,” Dal Col said. “He’d say, ‘I taught that kid how to think.’ ”

*Correction: An earlier version of this story referred to Newt Gingrich as House Majority Leader in 1998. He was House Speaker.