Van Hollen on Bloomberg: Market Turmoil Pressures Debt Reduction Committee

Washington, DC – Maryland Congressman Chris Van Hollen, Ranking Member of the House Budget Committee, today appeared on Bloomberg Television to discuss the Joint Select Committee on Deficit Reduction. Video of the interview is available here and the transcript is below.

ERIK SCHATZKER, BLOOMBERG: Chris Van Hollen is with us this morning from Capitol Hill. Congressman, good morning to you. Does the meltdown we have been seeing in financial markets these past few weeks put more pressure on the super committee to come to a deal on cutting the deficit?

REP. CHRIS VAN HOLLEN: Yes, I think it does. I think it’s put pressure on the committee in two ways. First, to make sure that we focus on jobs and the economy, because the fastest way, of course, to get deficit reduction in the short term is to put people back to work and get the economy going. That has to be coupled with a credible long-term deficit reduction plan. Those two things go together. Both of the bipartisan commissions that looked at this recently said you got to come up with a long-term plan, but do nothing to hurt the fragile economy. In fact, there are things you can do to help boost the economy.

SCHATZKER: Congressman, in your mind, how much of the turmoil stems from the lack of confidence businesses and consumers have in Washington’s ability to put America’s fiscal house in order?

VAN HOLLEN: Well, I think most of what we’re seeing stems from underlying conditions in the economy, both in the United States, but also, of course, in Europe and other places. We saw after the swings in the market, Treasury bond yields going down. You saw interest rates going down. We should, of course, not take that as a signal that people are confident in the long-term debt situation in the United States, but I think it does signal that the near-term issue really is the fundamentals in the economy right now, which is why I hope that the committee, the joint committee, will focus first on getting the economy going, but at the same time, put in place a plan that will be implemented to reduce the long-term debt. That’s essential for long-term economic growth. In the short term, it’s the other fundamentals in the economy we have to fix.

SCHATZKER: The President said he’d like the super committee to target more than $1.5 trillion in deficit reduction. Is that realistic?

VAN HOLLEN: I think it is. We’ve had at least two bipartisan groups, most recently the Simpson-Bowles Commission, that put in place a plan to do $4 trillion in deficit reduction. The plan congress just passed did about $900 billion, so about a quarter of that. And that commission, like the Domenici-Rivlin Commission took a balanced approach, said we’ve got to do this through both cuts and revenues by closing some of the tax loopholes, by asking folks at the very top, over a period of time, to pay more. So I think that they have given us a frame work. We don’t necessarily have to look at every detail, but I think those bipartisan groups have given this bipartisan group at least the framework we should look at and I think to the extent that we can do more than $1.5 trillion in deficit reduction, again, this is over 10 years, the better the signal that will be sent to the very markets that we are talking about.

SCHATZKER: Congressman, what will the Republicans have to put on the table for you to agree to more than $1.5 trillion of deficit reduction?

VAN HOLLEN: Again, it’s not what I would demand or any person would demand. I think the bipartisan groups that have looked at this most recently, and I go back to Simpson-Bowles and Rivlin-Domenici, have laid out that framework – that you need to have a combination of cuts, and again, we already made round one of cuts, but you also have to cut things like unnecessary and inefficient subsidies to some special interest groups, and you need to look at the question of how much folks at the very top are paying. Again, the President has laid out some proposals, saying we should return to the same tax rates that were in place during the Clinton Administration, which, of course, was a period of time when the economy was booming and 20 million jobs were created.

SCHATZKER: Congressman, we thank you for your time this morning. Congressman Chris Van Hollen. He is one of the 12 members of a congressional committee.