Van Hollen on PBS: Republican deficit proposal is ‘A tax break for folks at the very top’

Nov 10, 2011

Washington, DC – Maryland Congressman Chris Van Hollen, Ranking Member of the House Budget Committee and member of the Joint Select Committee on Deficit Reduction, appeared last night on PBS’ Nightly Business Report to discuss the deficit committee’s work. Video of the interview is available here and the transcript is below.

SUSIE GHARIB, NBR: The clock is ticking for the so-called supercommittee on Capitol Hill. There are exactly two weeks to go for the supercommittee to come up with a plan to cut the Federal deficit by more than $1 trillion. And for the first time, Republicans have offered tax increases -- some $300 billion worth. For more on that offer and a progress report on the supercommittee’s deficit cuts, Washington bureau chief Darren Gersh spoke to Representative Chris Van Hollen. He’s a Democratic member of the supercommittee. Darren began by asking Van Hollen what Democrats think about those tax hikes that the Republicans have offered.

REP. VAN HOLLEN: I can’t get into all the details, but if you look at the public reports, what they’re proposing is actually a tax break for folks at the very top, compared to current law. That means if Congress did nothing, the folks at the very high end of the income scale would actually be paying significantly more in taxes than they are under their proposal. So, you got to take a look at it in that context.

DARREN GERSH, NBR: But Republicans have offered tax increases. Isn’t that progress?

VAN HOLLEN: Our view is that you should achieve at least as much with respect to high-income individuals as current law as if Congress did nothing, as if there were no joint committee. So I don’t think that’s progress.

GERSH: The big problem seems to be that Republicans won’t move on revenue. Democrats won’t move on entitlements and every budget expert says that you have to do both. So how do we solve this problem if you’re not going to move on both issues and is it possible to be solved?

VAN HOLLEN: It’s not true that the Democrats haven’t moved on entitlements. We recognize that we have to modernize the Medicare system. We need to reform it in a way that puts an emphasis on the value of care and the quality of care rather than the volume of care. And there are a lot of misaligned incentives that need to be fixed. What we will not agree to is end the Medicare guarantee, which was the House Republicans budget proposal and said to seniors, you’re forced into the private insurance market and you’re on your own to eat additional costs.

GERSH: But Nancy Pelosi said no Medicare cuts.

VAN HOLLEN: No, what she said is no cuts in benefits. And we do not want to reduce the benefits that seniors get under Medicare. But there are ways to improve the system that make sure that the incentives are aligned. For example, right now there are a lot of incentives in the Medicare system for overuse.

GERSH: Do you still see any prospect for a large agreement in the supercommittee because all the Washington analysts are bringing down their expectations for anything getting done.

VAN HOLLEN: Look, I think every member of the committee recognizes that we have a tremendous responsibility and that it would send a very good signal to the country if we were able to get something done. And so that remains our goal. I understand the skepticism, looking at the history up to today. We’re hoping to prove the skeptics wrong, but as we sit here today, I cannot tell you what the final outcome will be.

GERSH: If the supercommittee doesn’t come up with a package of cuts, the rules require that there will be automatic cuts in defense and entitlements called a sequester. But now the supercommittee is having problems, we’re hearing some members say these -- this sequester, these automatic cuts -- they’re too deep. They’re going to hurt too much in defense. We should do away with them. So if the supercommittee doesn’t come up with a package of deficit reduction, is Congress just going to rewrite the rules and say, well, you know, there just shouldn’t be any consequences?

VAN HOLLEN: That would be a huge mistake. And it would demonstrate a clear lack of seriousness about the deficit. If you undo the sequester, automatically, according to the accounting, the U.S. deficit will jump by $1.2 trillion. That would be a huge mistake. So people who are talking about undoing the sequester are not serious about tackling the deficit.

GERSH: Congressman Chris Van Hollen, thank you for your time.

VAN HOLLEN: Thank you.