Van Hollen Opening Statement: Mark Up of the Concurrent Resolution on the Budget for Fiscal Year 2014
Washington, DC – Today Maryland Congressman Chris Van Hollen, Ranking Member of the House Budget Committee, made opening remarks at the House Budget Committee Mark Up of the Concurrent Resolution on the Budget for Fiscal Year 2014. Below are his remarks as prepared for delivery:
“We gather at a very important moment for our country. Thanks to the ingenuity and resilience of the American people, and the emergency actions taken by the President and the Congress four years ago, we are continuing to recover from the worst recession since the Great Depression. Momentum in the job market continues to grow, but we still have a long way to go to help put people back to work, accelerate economic growth, and boost small business hiring. Yes, we can and we must steadily reduce our deficits and reduce and stabilize the debt. But we should do so in a way that immediately reduces the jobs deficit, rather than a budget that immediately makes that job deficit worse.
“Unfortunately, this Republican budget fails that simple test. The non-partisan, independent Congressional Budget Office (CBO) has shown that the approach taken in this budget will result in 750,000 fewer American jobs by the end of this year alone. At a time that we should be doing everything possible to grow the economy, the CBO has projected that this kind of plan will cut economic growth by nearly one-third this year. And an analysis yesterday by the Economic Policy Institute estimates that it will cost us 2 million jobs next year.
“So the issue is not whether we should steadily reduce our long-term deficits, but how we do it. We believe that our budgets should be blueprints for economic growth that lead to greater upward mobility, rising middle class wages, and shared prosperity. We believe we should share responsibility for reducing the deficit – rather than providing tax breaks for the very wealthy while balancing the budget on the backs of our middle class, our kids’ education and by violating our commitments to seniors.
“This Republican Budget once again takes an ideological, uncompromising approach to addressing our budget challenge. Mr. Chairman, last year we were told the presidential election was going to give the American people the opportunity to choose between two fundamentally different approaches to this challenge. They voted and they chose to reject the lopsided approach reflected in this budget.
“The American people rejected the idea that we will give additional tax cuts to the wealthiest Americans at the expense of middle class taxpayers, at the expense of important commitments we have made to our seniors, and at the expense of vital investments in our kids’ education, in breakthrough scientific research, and in our infrastructure that provides the hardwiring for our economy – investments that have helped make us the world’s economic powerhouse.
“Let’s take these one at a time.
“Simple math shows that this budget will finance large tax cuts for the wealthiest by raising the tax burden on middle class tax payers. The budget calls for dropping the top tax rate from 39 percent to 25 percent – cutting the tax rate for millionaires by over one-third – while holding overall revenues constant. Just last fall, the Tax Policy Center did an analysis of a far more modest plan put forward by Mitt Romney to reduce the top rate from 35 percent to 28 percent and showed that it would inevitably raise the income tax burden on individuals making under $200,000 a year. This budget’s proposal, which provides even bigger tax cuts to millionaires, will raise the tax burden on middle incomes families by an average of $2,000. At the same time, it does not close one single special interest tax loophole for the purpose of reducing the deficit – not one dime from ending the special breaks for corporate jets, big oil companies, or hedge fund managers.
“While providing a tax windfall to the very wealthy, this proposal absolutely guts vital investments that are essential to shared prosperity, upward mobility, and rising middle class wages. It protects Pentagon spending, but it more than doubles the already deep sequester cuts to non-defense discretionary spending – the category of funds that we use to support our kids’ education and boost scientific research into new discoveries that help cure diseases and fuel innovative technologies. At a time when our national infrastructure is in desperate need of modernization, this budget will weaken the backbone of the American economy. It shortchanges our future and is a recipe for national decline.
“The plan violates our commitments to our senior citizens in a number of ways. It reopens the Medicare prescription drug donut hole, immediately beginning to pile large additional bills onto seniors with high prescription drug costs. It takes a wrecking ball to Medicaid, slashing it by $810 billion over ten years. Remember, two-thirds of these funds are used to help seniors and individuals with disabilities. Finally, for everyone under 55 who has been paying all their life for Medicare insurance, they will now receive a voucher that declines in value relative to rising health care costs – leaving them to eat the difference. If this is such a good deal for seniors, you have to wonder why so many people in the Republican caucus opposed the idea of moving the effective date forward by even one year.
“Finally, let’s look at how this budget hits the political target of balance in ten years. First, it includes all the revenues generated by the new higher tax rates on individuals with taxable incomes over $400,000 a year – a measure that was opposed by the overwhelming majority of the House Republicans. It is ironic that, after hearing for so long that new revenues could not meaningfully contribute to reducing our deficit, this budget would not balance without them.
“Even more interesting is that this budget would not balance without Obamacare. It is simply a hoax to say this budget both balances in ten years and repeals Obamacare. Now, this budget does eliminate the important benefits and patient protections from Obamacare. It will eliminate provisions that prohibit insurance companies from denying insurance coverage based on pre-existing conditions, allow young adults to stay on their parents’ insurance until they’re 26 years old, and provide tax credits to small businesses to help them afford health insurance for their employees. But the dirty little secret is that, while this budget eliminates those important benefits of Obamacare, it keeps the rest; it keep all the parts that CBO showed helped reduce the deficit.
“Remember the $716 billion in Medicare savings that we achieved by ending overpayments to the private insurances companies and by modernizing the system without reducing benefits? We were told last fall that those savings would result in hospitals shutting down and a whole parade of other horrible consequences. Well those scare tactics were not true then, and they are not true today. That’s why all those savings are included in this budget. And remember all the tax revenues in Obamacare, those on higher income individuals, those on industries that will benefit from the fact that Obamacare will expand coverage, and those penalties from people who try to freeload on the system? All those taxes and revenues are included in this Republican budget.
“In fact, the dirty little secret is that this budget would not balance if not for the Medicare savings and all the revenues from Obamacare. It would fall at least $400 billion short in the tenth year. So no one can say with a straight face that they support this budget and support repealing Obamacare. You can’t have it both ways, because if you repeal all of Obamacare this budget is totally out of balance.
“Now I want to point out a very serious consequence of trying to have it both ways with Obamacare in this budget. By eliminating the Obamacare benefits while retaining the savings and the revenue, you will severely undermine our health care system. Many hospitals and other providers will go belly up. That is because your budget reduces reimbursements to these providers while also eliminating the provisions of Obamacare that provide them with 27 million more insured patients who will be able to pay for care. That is a formula for chaos in the health care system.
“Mr. Chairman, the election is over. The American people rejected the uncompromising approach taken in this budget. Next week, House Democrats will present a budget plan that takes a balanced approach to our budget challenges. It is time to bridge our differences, and to end the swings from one manufactured budget crisis to another. I hope that, as we move through the budget process over the next few months, we are willing to make the hard choices to reach a balanced agreement that is good for our country – one that accelerates the recovery while laying the foundation for strong economic growth, rising wages, and shared prosperity.”