Future of the Debt Debate: Interview with Rep. Van Hollen
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A few weeks ago, the Congressional Super Committee process came to an end without a bipartisan agreement on dealing with our national debt. So where do we go from here? What’s the future of the debt debate? And how will it impact our generation? We decided to explore each of those questions- interviewing leading experts and policymakers, and offering up diverse perspectives from our Contributors at colleges and universities nationwide. Read on and join the conversation below:
On Friday, December 2nd, NGJ Editor-in-Chief Connor Toohill connected with the Democratic ranking member on the House Budget Committee, Rep. Chris Van Hollen, for an exclusive chat:
Audio
Rep. Chris Van Hollen Interview by Connor Toohill
Highlights
On 2012- “Well, here I have to distinguish between hope and my best guess, okay? I mean, I would hope that we could tackle some of these issues in the next year, but my best guess is that a lot of these issues will have to be resolved after the election, and that this election will be fought over some of the big decisions that we have to make as a country on these very questions.”
Why the Republicans’ Super Committee proposal was rejected: “The plan that Republicans put forward in the context of the Super Committee talks didn’t even get to the starting gate, as measured by Simpson-Bowles. If you look at the Simpson-Bowles plan over ten years, they call for $2 trillion in additional revenue versus $250 billion that was put on the table through the Republican proposal. And so that, obviously, doesn’t begin to address the balance that we need.”
On criticisms of President Obama’s role: “Well, the President put forward a plan for deficit reduction in the context of the Super Committee negotiations. In other words, back in September, he submitted his proposed plan, and actually it contains a number of the recommendations put forward by Simpson-Bowles. I mean, the President may not have immediately embraced all the recommendations but if you look at the proposals he’s made recently, it contains some of the key elements from Simpson-Bowles.”
On Democratic leverage: ”The fact that the Bush tax cuts expire at the end of the year and that you have this sequester trigger mechanism, should focus everybody’s minds on these issues. But the ultimate question on the revenue side is whether our Republican colleagues are willing to have revenue be a significant part of the solution to the deficit crisis, as Simpson-Bowles recommends.”
Full Transcript
Connor: So just to start off, then, you served on the Super Committee, you were part of all those negotiations. In the wake of that Committee, where do we go from here?
Rep. Van Hollen: Well first I should say that I’m very disappointed that we were unable to reach an agreement. I thought the Super Committee had a big opportunity to try and tackle some of the fundamental challenges we face and obviously we didn’t reach an agreement, so we’re going to have to tackle those issues in the coming months and years.
So my goal in the Super Committee was to try to address two related issues. One was the immediate situation we face with the economy, a very fragile economy- to try to do what we can right now to boost economic growth and job growth, not only because a lot of people are hurting and out of work, but the faster you get people back to work, the sooner you’ll be able to address the deficit. Because the nonpartisan Congressional Budget Office found that over one third of our current deficit is due to the fact that we’re not at full employment, that we have a weak economy. In other words, if we were at full employment, the current year deficit would be reduced by more than one third. So it was an important goal.
Second was, as we implement a plan for long-term deficit reduction, that it should be done in a balanced way, meaning that we should ask for shared responsibility. We’ve got to make some really tough decisions when it comes to making cuts, but we also need to ask for more shared responsibility and address the revenue side of the equation. And that’s why the framework laid out in the bipartisan Simpson-Bowles recommendations, I thought, provides a good guide. Not every particular proposal, but their overall framework for reaching deficit reduction in a balanced way, meaning their mix of deficit savings through cuts and revenue.
And so the challenge is going to be to put together that kind of broad based and bipartisan deficit reduction plan. And the reason it’s important we put together that plan is that as the economy recovers, the deficit will then become a break on future economic growth. If we don’t tackle the deficit issue, it will constrain long-term economic growth. And so it’s really important that we tackle it, and the sooner we can begin, the better. And I had hoped that the so-called Super Committee would be able to start that effort.
Connor: Do you foresee anything happening within the next year, or do you think this is ultimately going to come down to the next election?
Rep. Van Hollen: Well, here I have to distinguish between hope and my best guess, okay? I mean, I would hope that we could tackle some of these issues in the next year, but my best guess is that a lot of these issues will have to be resolved after the election, and that this election will be fought over some of the big decisions that we have to make as a country on these very questions. For example, one of the reasons that the Super Committee was not successful, at least from my perspective and I think from the perspective of a lot of bipartisan observers, was that the proposals put forward by our Republican colleagues did not meet the test of balance. And I’d like to send you, and Bridget Fry can send you, an Op-Ed piece that ran in the Sunday edition of the Washington Post last Sunday.
Connor: Right, ok.
Rep. Van Hollen: And my point is that, I hope the public will use a bipartisan benchmark for measuring what constitutes a balanced plan. So I don’t think anyone should have to take the Democrats’ word for what’s a balanced plan, don’t take the Republicans’ word for what’s a balanced plan, but Simpson-Bowles provides that kind of standard. I mean, Simpson Bowles, as you know, was a bipartisan commission, and their recommendation received a majority vote of the commission. And that provides, at least, a starting point for analyzing different plans and when it comes to the revenue side of the equation, they advocated for a significant revenue component to their plan.
The plan that Republicans put forward in the context of the Super Committee talks didn’t even get to the starting gate, as measured by Simpson-Bowles. If you look at the Simpson-Bowles plan over ten years, they call for $2 trillion in additional revenue versus $250 billion that was put on the table through the Republican proposal. And so that, obviously, doesn’t begin to address the balance that we need. And the reason it’s important to address the deficit in a balanced way is that if we tried to do it all through cuts, we would not be able to make very important national investments that are important for our economic growth and for our international competitiveness. Including investments in education, including making sure that students are able to go to college at an affordable price. I’m sure you know how difficult that’s becoming.
Connor: Right.
Rep. Van Hollen: And ensuring that we make the investments in the future that this country’s made in the past, in things like research & development and innovative technologies. And so if we fail to make those investments in our future, we will fall behind. A lot of our competitors are following our successful model from the past, and we need to continue to make those kind of investments in the future. So we do need to tighten our belt, and we do need to reduce the deficit in part by making cuts, and frankly reforming some of our health programs. But you can’t do it on the cutting side alone without undermining our long-term economic competitiveness.
Connor: I want to go back, really quickly, to what you said about Simpson-Bowles. We talked to Gov. Mitch Daniels earlier this week, and he was rather harsh on the President. He mentioned that he’d lost trust in his ability to lead, and one of the major reasons for that was he (Daniels) didn’t think he was active enough on the Simpson-Bowles recommendations. If President Obama does win a second term, what do you think he will do and what do you think you and the rest of the Democratic leadership will do with regard to our debt?
Rep. Van Hollen: Well, the President put forward a plan for deficit reduction in the context of the Super Committee negotiations. In other words, back in September, he submitted his proposed plan, and actually it contains a number of the recommendations put forward by Simpson-Bowles. I mean, the President may not have immediately embraced all the recommendations but if you look at the proposals he’s made recently, it contains some of the key elements from Simpson-Bowles. And if you look at the plan that Democrats put on the table in the context of the Super Committee negotiations, it’s in fact right on target with the Simpson-Bowles framework, whereas the Republican plans were not ever at the starting gate.
So, it’d be very helpful if Gov. Daniels wanted to put together a piece of legislation modeled after Simpson-Bowles for the consideration of his Republican colleagues. And the reason I say that is, as I said, Simpson-Bowles took this balanced approach. And some of our Republican colleagues seem to only focus on the cuts recommended by Simpson-Bowles, and not the revenue half of the equation. And so it’d be interesting to hear if Gov. Daniels supports the revenue component of Simpson-Bowles, because every House Republican who was on the Simpson-Bowles committee voted against it.
Connor: So obviously we’re seeing sort-of a struggle over these big issues, and unfortunately there hasn’t been, as you mentioned, a whole lot accomplished lately. What’s your response to young Americans who see that and start to think that our political system isn’t capable of solving these big issues.
Rep. Van Hollen: Well, number one, I hope that they will get even more involved than they are. I think you’ve got a number of younger Americans, people of your generation, who are actively involved- obviously you’re actively following these issues. I think that’s going to become even more important in the coming months. I know it sounds trite, but the reality is these decisions will directly impact your generation, both in terms of the immediate decisions and the long-term debt decisions. So number one, I hope people will get even more involved through all different ways. I don’t mean involved politically, but more generally just in the public dialogue.
Second, look I’m an optimist- I think that the political system can work through these challenges. We’re in an era of divided government, and by design, it’s difficult to get big policy changes through. And that’s so that we want to make sure whatever we do makes sense for the country. And I hope that after the election, we will be able to resolve some of these issues. I think as you get farther into the election year, it becomes more difficult. But there’s also this fundamental question that people are going to have to face, whether people want to take this balanced approach to deficit reduction. That really is a fundamental question- I think most Americans want to take a balanced approach, and I don’t mean that lightly.
I would say, if we can all agree to the definition that Simpson-Bowles has of balance, meaning the split they have of how much deficit reduction we will achieve through cuts and how much deficit reduction we will achieve through new revenue, that would be a good starting point.
Connor: Last question, Congressman; just a little bit more of a policy focus. Looking beyond the election, it seems like Congressional Democrats are going to have a lot of leverage now in terms of the trigger, and also the expiration of the Bush tax cuts at the end of 2012. How do you and your colleagues anticipate using that to get the kind of balanced solution that you talk about?
Rep. Van Hollen: Well, I think it requires…. These sort of big decisions ultimately require both political parties to work together, at least in the current configuration that we have, right? I mean, obviously we have, as I said, divided government, and the difference between divided government and dysfunctional government is willingness to compromise. I mean, that’s just the reality of the way our system is structured, where you have separation of powers so that when you have one President of one party in the White House, and another party in control of the House of Representatives, for example, you obviously have to find a way to work together to get things done.
And so, to answer your question, yes, you’re right- the fact that the Bush tax cuts expire at the end of the year and that you have this sequester trigger mechanism, should focus everybody’s minds on these issues. But the ultimate question on the revenue side is whether our Republican colleagues are willing to have revenue be a significant part of the solution to the deficit crisis, as Simpson-Bowles recommends. I mean, that’s what they recommend. Just numerically, if all the tax cuts were to expire at the end of next year- and that’s not just for the high end, that’s for everybody- if all of those tax cuts were to expire; well, let’s back it up. If you were to extend, at the end of next year, if you were to extend all of those tax cuts for another ten years, it would add $4 trillion to the deficit. Simpson-Bowles proposes that we not add $4 trillion to the deficit compared to current law, but that we add $2 trillion (laughing) to the deficit. Meaning compared to- and I hate to, but these are the kind of issues that people have to grapple with- meaning compared to current policy; compared to the current tax code, you’d be raising $2 trillion.
Connor: Right.
Rep. Van Hollen: Compared to where we’d be if you let all the tax cuts expire, you’d be increasing the deficit by $2 trillion instead of $4 trillion, instead of where we are now. I don’t know if you followed that, I’m happy to sort of….
Connor: Right, absolutely.
Rep. Van Hollen: My point is this: ultimately, one of two things has to happen. Either you have sort of a decisive outcome from the election, or both parties have to be willing to compromise in the aftermath of the election. And again, as I said, hopefully the election will inform a lot of these big questions. In other words, the debate in the general election hopefully will bring some clarity to these issues, so that after the election, there’s some sense of where the country wants or is willing to go on these questions.
Connor: Allright well Congressman, thank you very much.
