Van Hollen on MSNBC: Boehner debt bill ‘would keep a cloud over the economy, create instability’

Jul 28, 2011 Issues:

Washington, DC – Maryland Congressman Chris Van Hollen, Ranking Member of the House Budget Committee, today appeared on MSNBC’s Andrea Mitchell Reports to discuss the ongoing debt ceiling negotiations. Video of the interview is available here and the transcript is below.

ANDREA MITCHELL, MSNBC: Maryland Congressman Chris Van Hollen, who is ranking member on the Budget committee and member of the Democratic leadership. You heard Senator Crapo, who has been one of the conciliators, one of the people at the table working with Senators Durbin and others in the Gang of Six. Is that the outline of something you think can be sold and would succeed in the House with Democratic votes?

REP. CHRIS VAN HOLLEN: I didn't hear all the details of what he put forward but clearly what we have to do is go through the following steps. The Boehner bill, assuming it gets out of the House, will be defeated in the Senate. Harry Reid has made that clear, and you have over 50 senators. Then it's going to be necessary for Senator McConnell, obviously, to get together with Senator Reid and put together something that can pass the House. Exactly what that looks like is going to require the same kind of back and forth discussion that we've had unsuccessfully up to this point, and as the clock ticks, hopefully we'll be able to forge that compromise that has eluded us so far.

MITCHELL: Apparently they are holding out for some kind of trigger, some kind of enforcement that down the road, these cuts will be real, not notional cuts, not cuts of projected defense funding if we bring the troops home, that kind of deal, to get rid of the gimmicks.

VAN HOLLEN: That's right. Look, I think you want to identify a target for deficit reduction, in other words, we want to reduce the deficit by an agreed-upon amount, and to make it real you would have to have triggers. We have always said we should have triggers in order to provide that guarantee that you get the deficit reduction. What's always happened is that our Republican colleagues have refused to have balance, meaning we said you have to have triggers that would have automatic cuts but you also have triggers that have a revenue component, triggers that would generate revenue whether from closing corporate tax loopholes or whether it’s from asking folks at the very top to pay more or any other ideas our Republican colleagues may have to make sure we have a balanced approach. So we don't end up balancing the budget by slashing Medicare, slashing Medicaid and cutting education. The President has said $3 in cutting spending to $1 in revenue as part of a balanced package. If you could design a package that had triggers, that had that kind of balance, that would be a potential way forward.

MITCHELL: Congressman, should the President veto a short-term deal? Let’s say this all collapses, the negotiations over the weekend don't pan out, and what he is handed is really less than what he wants, a short-term deal. He hasn't won on taxes, hasn't won on the duration of it. Should he take the risk of vetoing that, given the warning only today from the heads of all the major banks and the possibility of a downgrade no matter what happens?

VAN HOLLEN: I think if you were talking about a couple days in order to try and seal a deal that was pretty much made, that would be one thing. I think the President even indicated in the past that he would be open to that, if a deal was in sight. But there's no reason to put the economy in even greater jeopardy five months from now than we are today, which is exactly what the Boehner proposal would do. It would keep that cloud over the economy, it would create instability, it would continue to threaten increased interest rates and losses in people's retirement accounts, and the President's right to say we cannot afford that. Our economy is fragile right now. We should do nothing that hurts it more. And that’s unfortunately what the Boehner proposal does.

MITCHELL: Chris Van Hollen. I’m hearing a little bit of daylight, though. I’m beginning to see people talking in the same ballpark, at least. I’m betting this is going to be an interesting weekend.

VAN HOLLEN: Well Andrea, you put your finger on it. if you can create a mechanism so that if you don't get the deficit savings through the normal process, you have these triggers that guarantee that deficit savings in a balanced way through both spending cuts, but also revenue, then you can get there because then you're guaranteed that you get the deficit reduction at the end of the day. That would allow you to make sure you can extend the debt ceiling for whatever period of time you want.

MITCHELL: Chris Van Hollen, thank you very much. Thanks for joining us.