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Paul Ryan's warning: US must cut debt or face 'bitter austerity'

Rep. Paul Ryan (R) of Wisconsin believes a European-style debt crisis faces the United States if it doesn't clean up its financial situation.

Michael Bonfigli / The Christian Science Monitor
Rep. Paul Ryan (R) of Wisconsin at the St. Regis Hotel in Washington, D.C., on Feb. 16, 2012.

US Rep. Paul Ryan is chairman of the House Budget Committee. The Wisconsin Republican, one of the most influential legislators on fiscal matters, was the guest at the Feb. 16 Monitor breakfast in Washington.

The recent bipartisan deal to extend a cut in Social Security taxes through year's end:

"It is very frustrating that [the Senate wasn't] willing to cut $100 billion over 10 years [to pay for the tax break].... The payroll-tax deal, from a political perspective, certainly caused damage [to Republicans] because it muddled the differences [between the parties]."

The effect of Bush-era tax cuts expiring on Dec. 31:

"The whole tax code blows up at the end of the year.... Eight out of 10 businesses in America file their taxes as individuals.... In 2013, their effective top tax rate goes to 44.8 percent. [Other countries] are lowering their tax rates.... It is a growth killer."

GOP mistakes on tax policy:

"Republicans made the mistake of thinking, 'I am being pro free enterprise because I helped X company get this thing in the [tax] code,' when actually what you are doing is ... damage to the free-enterprise system because you are erecting ... a barrier to entry against ... competitors."

Mitt Romney's need to offer voters a vision of his plans:

"He is getting into that mode.... We just can't have an ordinary election where it is a personality contest.... We need to have an election with a mandate [for change] so we can actually fix these [financial] problems."

America's debt problems:

"If we keep kicking the can down the road, if we keep ducking responsibility and pushing it off to the next president and the next Congress, then we will have a European-type situation on our hands: We will have a debt crisis. That is bitter austerity."

Whether he would accept an offer to run as vice president:

"It is kind of like a bolt of lightning striking you. So what is the point of thinking about that?"

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