Van Hollen Opening Statement at Hearing on Removing the Barriers to Free Enterprise and Economic Growth
I do worry greatly about those who say the way forward is to adopt a suped-up version of many of the policies that got us in the mess to begin with”
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 Removing the Barriers to Free Enterprise and Economic Growth. Below is a transcript of his remarks:
“I want to join the Chairman in welcoming our witnesses here today, and let me start from a place where we all agree. We all love America; we all believe America is a unique and special place. We all believe in American exceptionalism. The question is: how do we keep America strong, dynamic, and exceptional? On that, we clearly have different views and would make different choices.
“We believe that our strength springs not only from the undisputed benefits of a free people pursuing their ambitions and dreams, but also from sometimes harnessing those talents for important national purposes. We believe that America’s greatness is not only from a collection of individuals acting alone for private profit, but also from our capacity to work together as Americans for the common good. We believe in constantly expanding the circle of opportunity so all Americans have the chance to prosper.
“And, Mr. Chairman, I must confess, and Governor Bush, I must confess, I’m a little surprised that you decided to be here today to criticize the efforts made over the last three years to lift the economy out of the mess that President Obama inherited. For eight years, President Bush pursued a failed ideology of trickle-down economics based on a theory that tax cuts for the very wealthy and an ‘anything goes’ license on Wall Street would boost our economy and lift all boats.
“Well, it lifted the yachts but the rest of the boats ran aground. The financial crisis hit and the economy and jobs went into free fall. By the end of those eight years, America experienced a net loss of private sector jobs. In fact, when President Bush left office we were losing jobs at the astounding rate of over 830,000 jobs a month. Americans’ retirement savings collapsed by one-third -- trillions of dollars -- between 2007 and the day President Bush left office. Our nation's fiscal health saw the greatest reversal in American history, from large projected surpluses to large projected deficits. I’ve searched the record and, as far as I can tell, during that eight-year period you did not challenge the Bush Administration's handling of the economy, or criticize the excessive spending or the rising deficits.
“Now I was looking at your testimony -- I’m looking forward to hearing it in full. You're here to tell us that government actions have prevented us from the kind of ‘snap-back economic recovery that we have seen in other post World War II recoveries.’ Carmen Reinhart and Kenneth Rogoff, two very distinguished economists who are often cited by Chairman Ryan, have demonstrated that economies hit by systemic fiscal crisis don't ‘snap-back’ within a year or two, but take significantly longer to recover. After all, none of the other post-World War II recessions required the kind of extraordinary actions taken by the Federal Reserve, as well as the huge Wall Street bailout called for by President Bush with the signing of TARP to stabilize the financial system and prevent another Great Depression.
“The TARP bill was, of course, a huge government intervention in the marketplace called for by President Bush, supported by now-Speaker Boehner, now-Chairman Ryan, Governor Romney, then-Senator Obama, and many of us on a bipartisan basis as a distasteful but necessary action to prevent a total financial meltdown with devastating consequences for the economy. But even with the rescue of the financial industry, Main Street America was feeling the economic pain as millions of Americans were losing their jobs. And we all know what the figures were -- 839,000 jobs lost per month. As I say, the economy was headed down at a very rapidly collapsing rate of 8.9 percent negative GDP. So, when the President was sworn in, he was determined to take action to help those Americans being hit by the economic tsunami, and he believed that if we adopted President Bush's proposal for government action to rescue reckless banks who helped precipitate the crisis, surely we should be willing to take action to help millions of Americans thrown out of work through no fault of their own.
“So President Obama and the Congress passed the economic Recovery Act, which the nonpartisan experts at the Congressional Budget Office concluded created or saved up to 3 million jobs in 2010 alone. The President also believed that if we had rescued the banks, surely we should prevent the U.S. auto industry from being wiped out, an action that saved more than one million jobs. This was not about crony capitalism, as the Chairman has suggested. It wasn't about doing special favors for well connected friends. It was about ensuring that a critically important industry in this country had a reasonable opportunity to survive given the financial crisis going on around it.
“Now, Governor Romney has famously suggested that we should have let Detroit go bankrupt, that the crisis should have been handled through the normal bankruptcy process. Bob Lutz, former General Motors vice chairman, who also happens to be a Republican, took umbrage with this and said, and I quote, ‘It's once again the fiction that 'Ah, we didn't need the government and this could have been a privately run bankruptcy with the normal Chapter 11.’ What these people always deliberately forget is there was no money. Nobody had any money.’ So when the Chairman and others refer to this as crony capitalism, I think many of us take great offense.
“We also passed the Wall Street reform bill to make sure that never again would reckless gambling on Wall Street wreak havoc on Main Street and leave taxpayers holding the bill. I will wrap up in a minute, Mr. Chairman.
“I would just like to point out, Governor, that during that period of time we weren't getting very much help from our Republican colleagues, not a single Republican House member voted for the Recovery bill, not a single one voted for the Wall Street reform bill. Senator McConnell, the [Republican] leader in the Senate, in a moment of candor said, and I quote, ‘the single most important thing we want to achieve is for President Obama to be a one-term President.’
“So, we have made progress on improving the economy and jobs. Are we where we want to be? Absolutely not. And today's jobs numbers show we need to make further progress. But let's learn the right lessons from what happened in the past, because if we diagnose the problem wrongly, then we'll have the wrong prescription. I do worry greatly about those who say the way forward is to adopt a suped-up version of many of the policies that got us in the mess to begin with.
“As we go forward, I hope we will try to find a way together, and I’ll just close with where I began on the point of agreement, Mr. Chairman. If there is a government program that's not achieving its intended purpose, let's amend it or get rid of it. We agree. If there's a regulation that's outlived its usefulness, get rid of it. I hope we would adopt the same approach with respect to special interests tax breaks. But, let’s again remember: we’ve made some progress, and we need to make more, let’s not misdiagnose the problem, and learn the wrong results.
“Thank you, Mr. Chairman.”