Van Hollen Opening Statement at Mark Up of the Sequester Replacement Act of 2012 and the Sequester Replacement Reconciliation Act of 2012

May 7, 2012 Issues: Sequester

Washington, DCToday Maryland Congressman Chris Van Hollen, Ranking Member of the House Budget Committee, delivered an opening statement at the House Budget Committee Mark Up of the Sequester Replacement Act of 2012 and the Sequester Replacement Reconciliation Act of 2012. Below is a transcript of his remarks:

“Thank you, Mr. Chairman, and hopefully we will not be here late into the night, but obviously we have important work to do and we should do it thoroughly, and there’s a lot here to discuss. Because we’re gathered here today to talk about important choices. Choices that reflect our priorities and choices that reflect our values. Once again it’s important to emphasize that the issue is not whether we should implement a plan to reduce the deficit in a steady, credible, and predictable way – we should. The question is how do we do it?

“The House Republican budget for the year reflected a lopsided approach to deficit reduction. It provided windfall tax breaks to millionaires, and at the same time ended the Medicare guarantee for seniors. It slashed investments that strengthen our economy, and shredded important parts of the social safety net that is vital for tens of millions of Americans. That unfair and unbalanced approach focused only on cutting investments and services rather than also closing tax loopholes, and that is the wrong choice for America. In contrast, the Democrats offered a budget that preserves the Medicare guarantee, helps to create more jobs now, makes us stronger through investments that build long-term growth, and reduces the deficit in a balanced way through shared responsibility.

“Now, the reason we’re here today is the Budget Control Act, which has two essential parts. One part cut discretionary spending over 10 years by a little over $900 billion – we set those levels in law for discretionary spending. The second part set up a mechanism that triggers another $1.2 trillion of across the board cuts over 10 years unless Congress comes up with an alternative amount of budget savings. Half of the cuts would come from defense programs, and the other half from non-defense programs that are not expressly exempted by the Budget Control Act.

“The reason defense cuts comprise 50 percent of the sequester is because our Republican colleagues, first in the Biden group and later on, refused to take a balanced approach to deficit reduction. That is, they refused to agree that part of the $1.2 trillion in deficit reduction should come from closing tax loopholes for special interests and ending tax breaks for the wealthy. They deliberately chose to put defense spending on the chopping block rather than close corporate tax loopholes and other revenue measures. In fact, Chairman McKeon, Chairman of the Armed Services Committee, expressed understandable concern about that choice at the time when he said, and I quote, ‘if it came that I had only two choices, one was a tax increase and one was a cut in defense over and above where we already are, I would go to strengthen defense.’ He later said, and this is in The Fiscal Times, ‘we’re going to have to stop repeating ideological talking points and address our budget problems comprehensively, through smarter spending and increased revenue.’

“I don’t know if the Chairman has changed his mind but he had it exactly right, and the proposal we have before us today, the Republican package, shows that nothing has changed since those earlier negotiations. It shows that our Republican colleagues continue to reject that balanced approach to deficit reduction. The plan before us is flawed for several reasons. First, it is only for one year, and even then, it doesn’t totally remove the sequester. It lifts the sequester for discretionary spending but leaves it in place for all mandatory spending except defense. As a result, it keeps the two percent across-the-board cut in Medicare, for example.

“Second, it continues the lopsided approach of the full Republican budget, protecting those special interest tax breaks at the expense of vital safety net programs. Some examples – and we’ll have an opportunity to discuss them more fully as this meeting proceeds – it cuts food and nutrition programs for families who are struggling financially to put food on the table. Even as we emerge from a tough economy, the Republican plan cuts off assistance to – cuts assistance to every eligible household starting on July 1st, and it cuts about 2 million people off food assistance entirely. Seventy-five percent of the households are families with children, and 300,000 children will lose their access to the free lunch program at school. At the same time, it doesn’t cut one penny from direct payment taxpayer subsidies to agricultural businesses. Not one penny.

“Now, the Budget Control Act deliberately shielded – deliberately shielded – programs for the most vulnerable from the sequester. So starting January 2, 2013, the sequester would not touch the food and nutrition programs. It would cut agricultural subsidies, and yet, in the name of avoiding the negative consequences of the sequester, this plan hits the food and nutrition programs, but totally exempts all of the agricultural subsidies.

“Another example, the Republican plan eliminates the Social Services Block Grant program which helps 23 million children and adults receive essential services. This includes some support for Meals on Wheels, prevention of child abuse and neglect, and child care for parents returning to work. This particular cut is bizarre for many reasons. First, we had a whole hearing on the importance of trying to help people get back to work, and yet this would cut support for child care assistance for people who want to try to get back to work. Second, we keep hearing from our colleagues that we should turn SNAP and Medicaid into a block grant program because that will give the states and local jurisdictions greater flexibility. Well, the Social Services Block Grant is just that, it provides maximum flexibility to local jurisdictions, and yet the one kind of program that you say you like, you eliminate, entirely. That’s a little clue I think as to what will happen to the other programs if they become a block grant program. Finally, if the sequester were to hit the Social Security Block Grant program would face a cut of approximately 8.5 percent, or $150 million, compared to a 100 percent cut/elimination.

“A final example relates to cuts to help coverage for kids, seniors and other Americans. The Congressional Budget Office estimates that the cuts to the Children’s Health Insurance Program will result in 300,000 kids losing their health care coverage within three years. Again, this is one of those trade-offs – it’s because we refused to consider closing loopholes for special interests. And again, I would point out that if the sequester went into effect – because on a bipartisan basis, I thought we voted to protect programs for the most vulnerable – none of those children would lose their health insurance. Not one of those 300,000 would lose it if the sequester went into effect. Yet, here we’re trying to ‘fix the sequester,’ but they will be left exposed. Apparently nothing has changed.

“Mr. Chairman and colleagues, there is a better way forward. The President’s budget, and the very similar Democratic alternative, include specific, balanced approaches to deficit reduction. We do think that’s a better approach, by far, than the meat-ax approach that the sequester would impose. But we need to come together and develop that kind of balanced approach to getting it done. Unfortunately, we were not able to do that during the Biden group discussions, and unfortunately we’ve not been able to do that to date. I hope some time before now and the election, and certainly before the end of the year, we’re able to come together and take the same kind of approach that bipartisan groups have recommended, meaning something that combines cuts with cuts to special interest tax breaks. And by doing that we can take a balanced approach, measured approach to tackling what is a very real challenge.

“Thank you, Mr. Chairman.”