Van Hollen Delivers Remarks at National Press Club Newsmaker Event on Sequestration, the Fiscal Cliff, and the Federal Budget

Washington, DC – Today Maryland Congressman Chris Van Hollen, Ranking Member of the House Budget Committee, delivered the following remarks at this morning’s National Press Club Newsmaker Event on sequestration, the fiscal cliff, and the federal budget. Below is a transcript of his remarks:

“Well, thank you very much, Bob, and thanks to the National Press Club for having us today. It is great to be here with my friend and colleague Tom Price.

“And let me begin on a point of agreement. I join Tom in urging all members of the press to very carefully scrutinize the proposals and numbers and make an independent determination as to what actually makes sense from the perspective of math and policy, and don't simply report he said, she said. We would encourage everybody to try and look at the proposals in great detail to see whether they make economic sense.

“Now, none of us have, of course, seen the president's State of the Union address. It's a very tightly held secret here in Washington, D.C. But I believe that the president will conclude that the state of the union is growing stronger by the day but that it could be made much stronger if we set aside much political ideology and focused on a sound economic strategy.

“And we've had a good start. After inheriting an economy that was in total free fall just about four years ago, losing 700,000 jobs every month, we have turned the corner, we're coming back, and net -- net private sector job growth over the period since the president was sworn in for his first term has been about 2 million jobs. And we've seen net -- we've seen positive job growth for the last 35 consecutive months, amounting to about 6.1 million jobs over that 35-month period.

“So that is good, but I think the president would be the first to say that that's not good enough. And so our focus has to be on expanding economic growth and boosting job creation. But our goal is not an economy that expands only for the folks at the very top. Our goal is not an economy that only works for people who have already made it big. Our goal has to be an economy that works for the middle class and for the entire country. It's not enough to say folks at the top will continue to move ahead while everyone else is left standing still or falling behind. It's not enough to say the yachts will rise but all the other boats will run aground.

“And so when we look at our economic policies, including our strategy for reducing the deficit, that has to be our North Star. Is it good for economic growth? Does it strengthen the middle class? Does it make sure that we have rising incomes for everybody in the country, a rising standard of living for everybody? And that includes making sure that we make good on our commitments to health and retirement security for our seniors. And so that has to be the measure.

“Now, in order to have a dynamic opportunity economy, we have to adopt and expand on proven strategies. We do need to invest in our future. We need to invest in national priorities to make sure that we can maintain our competitive edge and in fact sharpen that competitive edge.

“So that means we have to invest in education. If we really want a society that's upwardly mobile, we have to make sure people have the tools to do it. That means beginning with very early education, K through 12, college and making sure people have access to vocational training.

“It means investing in basic science and research, a strategy the United States has successfully pursued for a very long time and with great results. Remember, it was federal public dollars that helped seed the Internet. There is terrific research going on in this country at the National Institutes of Health and many other places that help provide our leading edge when it comes to the biosciences. We need to maintain and expand on that.

“We need to invest in our infrastructure. We just saw the report card from the American Society of Civil Engineers, giving us a big, fat D -- D -- a grade we would be embarrassed if our kids brought home on their report card. So we need to invest in our roads and in our bridges. And we need to invest in broadband so we can expand the information superhighway. The United States is falling behind many of its competitors in that area, and we cannot allow that to happen.

“So I mention all those things because it would be incredibly short-sighted to shortchange those important investments at this particular time.

“It is also true that we have to act now to put in place a plan to reduce our rising long-term deficits and debt that, unless we act, will go unchecked. And so there's no disagreement with that.

“But our deficit reduction plan should not just pick a number out of a hat, an arbitrary political number. It has to be in the context of an economic strategy. Again, the goal here is an expanding economy, growing jobs and making sure we strengthen the middle class. And how we deal with the deficit has to be addressed within that context.

“After all, if we look at some of our European partners, they said reducing the deficit by itself is their number one priority. They adopted austerity measures. The U.K. is now in its second recession. A lot of our Republican colleagues just -- I urge you to go back and look at the transcripts from three or four years ago. It was all about cutting. They thought that if we just adopted austerity measures, somehow, that would help the economy. Good thing we did not listen to their advice, because if we had, we wouldn't have seen the job growth numbers that I just talked about.

“So addressing the deficit must be done -- it should be done -- in the context of trying to grow our economy, grow jobs and strengthen the middle class.

“Now, let's apply those principles to some of the challenges we have right now.

“The sequester -- allowing the sequester to kick in on March 1st with $85 billion in arbitrary across-the-board cuts between March 1st and September 30th is dumb economics. It is bad for job growth. In fact, if you look at the most recent Congressional Budget Office assessment and outlook, it indicates that they believe that the sequester would cost us 750,000 jobs this year, 750,000 jobs. We should not allow that to happen.

“Now, if you look back in the Congressional Record to last September, Republican leader Eric Cantor made what I think was an important observation. He said, and I quote, if you allow the sequester to go into effect -- here I quote -- unemployment would soar, unquote. It would set back the progress that the economy has made, and he cited a study that showed it would cost 200,000 jobs in Virginia alone. That was the Republican leader.

“Now, I want everyone to focus on that statement because it's a clear admission from our Republican colleagues that deep cuts in government spending do cost jobs, that how you deal with the deficit has an impact on jobs. And if you do it -- if you cut too quickly and too deeply, it will hurt the economy and hurt jobs -- something we don't hear much about from our colleagues, but I think it was an important admissions from the Republican leaders last September.

“So that's why we on the Democratic side have proposed replacing those deep, immediate, across-the-board cuts with a combination of targeted cuts and revenue from reducing tax loopholes that take place over a longer period of time.

“Taken together with the interest savings, you get about $2 1/2 trillion in deficit reduction.

“Now, we should replace the sequester, again, with a mix of targeted cuts and revenue -- $1.2 trillion is the 10-year cost of the sequester -- and we should find a way to replace that and continue to work on additional efforts.

“Now, our Republican colleagues, it's interesting. They've said, no more revenue. If I recall during the last campaign, Republican presidential candidate Mitt Romney and vice presidential candidate Paul Ryan talked a whole lot about how our tax code was filled with tax loopholes and tax breaks that disproportionately benefit a very wealthy people. In fact, their whole tax plan was to begin to eliminate some of those loopholes. They wanted to use it dollar to dollar to reduce the -- reduce the rates.

“But they talked about all these loopholes. Guess what? Those are all still out there right now, as we speak. In fact, Speaker Boehner, when he was having the most recent round of discussions with the president, proposed that we raise $800 billion from closing those tax loopholes. You all wrote about it. It's out there, 800 billion (dollars). None of the revenue from closing that -- those loopholes that you talked about has been achieved as part of any of these agreements.

“So Speaker Boehner's proposal, although we haven't seen the details, is still out there. And by the way, his proposal at $800 billion was more revenue than was included in the fiscal cliff agreement at a little over 600 billion (dollars) in revenue. So it's curious to hear our Republican colleagues say, no more revenue. The reason they say it is because the Grover Norquist pledge, which 98 percent of the House members on the Republican side have signed, says you cannot close one tax loophole for the purpose of deficit reduction.

“Now, if the priority really was deficit reduction, you'd be willing to close some big oil and gas loopholes to reduce those deficits. I hear our Republican colleagues talk about those deficits and debt and the impact on future generations. All that's true. But apparently that's never important enough to shut down some of these tax loopholes for carried interest for hedge fund managers, that kind of thing. You can't close one loophole for the purpose of deficit reduction, and that's because the overall priority here is really not deficit reduction on the Republican side. It is, as Grover Norquist himself said, reducing government to the size that you can drown it in a bathtub. That's why you pick an arbitrary political date to hit a particular target. And when you do that, you will drown our investments in education for our kids, you'll drown our investments in R&D, you'll drown investments needed to make our country grow and you will drown the social safety net of Medicare, Medicaid and Social Security, and that is the goal that Grover Norquist set out, and that's what you do when you set up particularly arbitrary date, as opposed to one based on economic reality and the desire to grow an economy a way that strengthens the middle class.

“So I will just close by saying that we have litigated a lot of these issues. It was in the last presidential campaign. And Mitt Romney and Paul Ryan both talked a lot about how the people of this country faced a very clear choice, different paths. They laid out their path. The president laid out his path on these questions, on these big questions: How do we deal with our economy? How do we ensure we strengthen the middle class? How do we deal with deficit reduction in a balanced way? And the people voted, and every public survey, from them till now, shows the American people still support the president's strategy of strengthening the economy, strengthening the middle class and reducing the deficit in a balanced way, consistent with sound economics, not with political ideology.

“So if we can focus on an economic plan -- and that comes first; those principles I've laid out are our north star -- then, together, we can move this country forward. But if we're going to go from artificial to artificial crisis and threats of government shutdown, then it's going to be very difficult to achieve.

“So I hope tonight after the president's State of the Union address, we will be able to come together. I know the president will call upon everybody to work together to get the job done and expand job growth and opportunities for everybody in our great country. Thank you.”

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