Van Hollen Opening Statement at Hearing on the Congressional Budget Office’s Long-Term Budget Outlook
Washington, DC – Today Maryland Congressman Chris Van Hollen, Ranking Member of the House Budget Committee, delivered an opening statement at the House Budget Committee Hearing on the Congressional Budget Office’s Long-Term Budget Outlook. Below are his remarks as prepared for delivery:
“Thank you, Mr. Chairman, and welcome, Dr. Elmendorf.
“Two weeks ago, the Congressional Budget Office (CBO) released an analysis of the economic effects of the ‘fiscal cliff,’ painting a somber picture of what might happen if Congress fails to address expiring tax cuts and the looming automatic spending cuts that occur at year’s end: a possible recession early next year and millions more people put out of work. Yet, CBO’s long-term budget outlook released yesterday also confirms that continuing to do business as usual – extending all current tax and spending policies – will produce unsustainable deficits and debt, which would also hurt the economy in the long run. Taken together, the two CBO reports reinforce the fact that Congress must adopt a two-track strategy of: 1) acting now to boost our fragile economy and help put more Americans back to work, and 2) acting now to put in place a balanced approach to long-term deficit reduction that doesn’t take resources out of the economy in the near term. This is the opposite approach to those who advocate for immediate, steep austerity measures – the type of measures that have pushed some of our European partners like the United Kingdom back into recession.
“The first step is to put Americans back to work. So we need to enact the President’s job proposals that the White House sent to the Congress nine months ago. That proposal includes significant new investment in building roads, bridges, transit ways, and other needed infrastructure. At a time of 14.2 percent unemployment in the construction industry and super-low interest rates, this should be a no-brainer. I again call on Speaker Boehner to put the President’s jobs proposals to a vote on the House floor.
“The second step is for lawmakers to adopt a plan to reduce the deficit in a balanced way, by applying the kind of framework of spending cuts and revenues generated by eliminating certain tax breaks that has been recommended by bipartisan groups such as Simpson-Bowles. That plan should extend tax relief for working families and replace the sequester with a balanced approach to deficit reduction so that our economy never goes over the fiscal cliff. Speaker Boehner’s threat to let the nation default on its debt if Republicans can’t impose their European-style austerity plan is cementing the view in capital markets that lawmakers will fail to reach an agreement before the end of the year. That manufactured crisis creates uncertainty that will undermine confidence and weaken the economy. The Standard and Poor’s downgrade of the U.S. credit rating last year was due to forecasts of continued political gridlock. Yet for many in the tea party movement, compromise remains a dirty word.
“We’ve already enacted $1 trillion in spending cuts under the Budget Control Act and Democrats support additional, targeted spending cuts – provided these are accompanied by eliminating tax breaks for millionaires, Big Oil companies, and other special interests. In contrast, Republican budget proposals would hurt seniors and the most vulnerable while expanding tax breaks to the wealthy and fail any test of balance and responsibility.
“We are told that within the next few months Republicans will vote to extend all of the Bush-era tax cuts, including those for millionaires. CBO’s analysis shows that extending all of the cuts, including tax breaks for millionaires, will increase the long-term deficit and reduce long-term growth. Democrats support extending tax cuts for over 99 percent of Americans filing tax returns, while letting tax cuts for millionaires expire. Combined with additional loophole closing and base-broadening at the top, this proposal could reduce deficits by nearly a trillion dollars over this decade and by much, much more over the long haul.
“CBO’s long-term outlook shows that the aging of the population drives nearly 70 percent of the cost of Social Security, Medicare, and Medicaid. The Republican budget addresses federal spending by ending the Medicare guarantee for seniors, unloading the financial risk of future health care cost growth onto elderly and disabled individuals – all so they can expand tax breaks for the wealthiest individuals.
“Unfortunately, we have yet to find a willing partner in our Republican colleagues. This is evidenced by Speaker Boehner’s refusal to take up the President’s jobs bill, the insistence on holding tax relief for 99 percent hostage to tax breaks for the top 1 percent, and the Speaker’s threat to default on the obligations of the U.S. if we don’t adopt the European-style austerity approach to the budget.
“It’s time for the GOP to put the needs of all American families ahead of millionaires and Big Oil companies, and meet Democrats half way to boost our economic recovery and get our fiscal house in order.”