How Would the Paul Ryan Budget Plan Impact Corporate America?

The political matchmaking of Republican presidential candidate Mitt Romney and his new running mate, Wisconsin Representative Paul Ryan, was much noted for its pairing of two complementary backgrounds: Romney built his name in corporate America, while the 42-year-old Ryan has already logged 14 years in the U.S. Congress and is chairman of the House Budget Committee.

What, though, would Ryan—and his now-famous “Roadmap” budget plan—mean for business?

Nearly a week after the Romney campaign’s VP announcement, there are still many questions about the potential impact of the Ryan budget plan. For one thing, while we know that Ryan seeks to lower the corporate tax rate from 35 percent to 25 percent and eliminate loopholes, he has not been specific about which loopholes would be closed. Ryan has so far only confirmed that he’ll confirm the details . . . after the November election.

Ryan’s views on deficit reduction, however, present some interesting contrasts between the Wisconsin Republican and some vocal business leaders.

Blogging at Fortune, Nin-Hai Tseng writes “CEOs for Paul Ryan? Not so fast.” On one hand, she notes, Ryan’s voting record last year certainly won points with both the National Federation of Independent Business and the U.S. Chamber of Commerce: “Ryan has been revered by U.S. business leaders for his message of smaller government and reduced regulatory burdens.”

But as for how to reduce the U.S. deficit, Ryan and the chief executives of some of the largest corporations in the country might not be on the same page. Here, “corporate America has generally pointed to the 2010 Simpson-Bowles plan, which is strikingly different from Ryan’s vision in many ways,” Tseng says. While Ryan voted to reject the plan:

CEO heavyweights from Jeff Immelt of GE (GE) to Jamie Dimon of JPMorgan (JPM) to Dave Cote of Honeywell (HON) (who was a member of the Simpson-Bowles commission) have supported the plan that would blend spending cuts with tax increases to wring $4 trillion from federal deficits over the coming decade. Admittedly, many have said the plan isn’t perfect, but it at last serves as a blueprint for tackling the deficit. Even Romney himself has endorsed the plan his running mate rejected, saying as recently as Aug. 2 that “my [deficit reduction] plan is very similar to the Simpson-Bowles plan.”

Earlier this week, Andrew Ross Sorkin, writing for The New York Times’ Dealbook blog, also highlighted the gap between Ryan and “the industry’s biggest talking point these days, the Simpson-Bowles deficit reduction plan.”

And although Ryan’s business-friendly bio includes a penchant for blue-chip stocks and a fondness for Ayn Rand, Sorkin says some of Ryan’s views on how Wall Street should operate may come as a surprise.

In 1999, Ryan voted to repeal portions of the Great Depression-era Glass-Steagall Act—but he’s no longer too keen on too-big banks. Sorkin quotes Ryan on the subject:

“We should make sure you can’t get too big where you’re going to become too big to fail and trigger a bailout,” Mr. Ryan said during a meeting with constituents in May in Wisconsin. “If you’re a bank and you want to operate like some nonbank entity like a hedge fund, then don’t be a bank. Don’t let banks use their customers’ money to do anything other than traditional banking.”