MSNBC "Hardball with Chris Matthews" - Transcript

Interview

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REP. CHRIS VAN HOLLEN (D), MARYLAND: Well, no one can answer that question precisely, Chris. But the key is not to play --

MATTHEWS: Well, give me a guesstimate. Give me a guesstimate.

VAN HOLLEN: Well, we know what August 2nd is the date the secretary of the Treasury says that we would default on our debts. So, obviously, we"re trying to get things done sooner rather than later. The closer you get to that date, the more jittery the markets get, and the higher the probability as you"re going to get higher interest rates.

Certainly, if you go beyond that date, you really risk economic catastrophe, as Ben Bernanke, the chairman of the Federal Reserve, has said.

MATTHEWS: Well, then, here"s my point--and I guess it"s political -

the Republicans seem to be so upset at the prospect of raising revenues in any way to balance this budget problem, that they"re willing to go to the point of costing this government billions and billions of dollars in higher interest costs to manage the debt, to service the debt. Am I right about that?

VAN HOLLEN: That"s exactly right. They are playing Russian roulette with the fully loaded revolver because the consequences are exactly as we say.

Now, you hear some harebrained schemes that say, don"t worry, we will pay our bondholders first. For example, China and other foreign governments who hold U.S. treasury bonds. We won"t pay our troops, we won"t pay Social Security. And therefore, the markets will be calm because the bondholders will be being paid.

Well, first of all, wrong priority. We shouldn"t be paying China and not paying our troops. Number two, anytime the U.S. government is not making good on its obligations, even whether to our troops or Social Security or anybody else, that will send jitters to the bond market and that will have an impact on interest rate.

So, we"re going to lose both ways if we do that. We will all lose both ways of we do that.

MATTHEWS: Senator Durbin was very courageous on Sunday. He was courageous before in backing the bipartisan--the president"s commission on debt reduction, I thought. He said everything is on the table.

Is that your view?

VAN HOLLEN: Well, we support the framework of the bipartisan commission. What I mean by that is Simpson-Bowles said that in order to achieve the deficit reduction targets that we wanted, like in the range of $4 trillion, whether it"s over 10 or 12 years, you have to get a certain amount from cuts and you should get a certain amount from revenue.

And we support that structure in terms of the balanced plan. We have said in order to get a real plan, you not only need to make cuts, but you also need to close a lot of these tax loopholes for oil and gas companies, for ethanol producers, whatever it may be, in order to have a fair approach.

Now, I should say that when it comes to Social Security, for example, both sides have agreed that that"s better dealt with on a separate track, where we have to strengthen Social Security, like Tip O"Neill--you know the story there.

MATTHEWS: I was there.

VAN HOLLEN: Tip O"Neill and Ronald Reagan--you were there--got that done, that that should be handled on a separate track.

MATTHEWS: Let me ask you about the facts. The American people understand this fight. Democrats are very jealous of any attempts to cut entitlements, especially Medicare and Social Security. They built those programs. They believe in them.

People watching these shows believe in those programs. Most Americans believe in them, Democrat or Republican.

They also don"t like taxes. Now, maybe we"ve been taught that we can get away with a government without taxes by Reagan and other people, we have been.

Fundamental question: can we get to the solution here? Can we avoid a bankruptcy, a doubling of, whatever, interests, spike of interest rates, by raising revenues without raising tax rates? Is there enough loosey-goosey-ness in our tax structure that we can raise the revenues by plugging loopholes alone to meet this need?

VAN HOLLEN: Chris, I certainly think in the short and median term, we can do that. In other words, there are enough loopholes on the tax code, both on the corporate side, some on the individual side, that you can close to generate that kind of revenue as part of the balanced package.

MATTHEWS: OK.

VAN HOLLEN: In the longer run, in the longer run, you"re going to have to deal with rates. And I think the campaign in 2012 that the president will take to the country is one about priorities.

MATTHEWS: OK. Let"s go--

VAN HOLLEN: He will argue the folks at the very top, just ask them to go back to the rates from the Clinton administration.

MATTHEWS: OK. You give me--in the short run, we can avoid this crisis without raising rates. On the Democrat side, in this short run again, can we deal with entitlements without--in a serious way, bringing into doubt the credibility of Medicare, the reliability of Medicare? Can you find cuts without taking away the people"s rights at the age of 65 to medical care?

VAN HOLLEN: You"re absolutely right. We are not going to do anything like the Republicans did, getting rid of the Medicare guarantee. We have said we can build on the things we did in the Affordable Care Act that rewards and incentivizes doctors based on the value of care, they provide not the volume, not the number of tests.

MATTHEWS: Got you.

VAN HOLLEN: We"ve also--we"ve also said, when it comes to, for example, the prescription drug companies, why shouldn"t Medicare have the same bargaining authority as we give to the Veterans Administration, to get a good price on drugs--

MATTHEWS: Got you.

VAN HOLLEN: -- and go back to the same price we were getting on drugs before the 2005 prescription drug deal.

MATTHEWS: OK. Sounds like you"re there.

VAN HOLLEN: So, there are specific things.

MATTHEWS: Sounds like you see the light at the end of the tunnel, sir, in terms of avoiding a fiscal catastrophe. Is that true?

VAN HOLLEN: Well, I"m hoping, Chris. I mean, we"re slugging it out.

There are some different choices that need to be made.

MATTHEWS: OK.

VAN HOLLEN: But the point you made is key, Republicans have to understand that closing tax loopholes for special interest, all that pork barrel spending through the tax code, has got to be part of any solution.

MATTHEWS: OK. I hope so. Thank you. It"s well--thank you so much for coming on.

VAN HOLLEN: Good to be with you.

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