CNN "State of the Union with Candy Crowley" - Transcript

Interview

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CROWLEY: Joining me now, the top Democrat on House budget committee, Congressman Chris Van Hollen of Maryland.

So the Speaker of the House says I don't think we can do this deal, let's go back to the Biden talks. You were in the Biden talks, everyone says that's about a little over $2 trillion in savings, let's do that. Is that a done deal?

VAN HOLLEN: Not a done deal at all, Candy. In fact, the vice president has said that we identified about trillion in savings. We're nowhere close to $2.4 trillion. So to go back to that process, I think is -- it's sets in motion all over again.

CROWLEY: How long have you been negotiating for that trillion?

VAN HOLLEN: We've had at least ten sessions. And let me say this, even that trillion was contingent on an overall agreement which meant the Republicans had to agree to some revenue component.

Let me go to the failure of these big talks. Here's the issue, at the end of the day what we're seeing is the priority of our Republican colleagues is not to get a deficit reduction deal, it's to protect special interest tax breaks for big corporations. We had the corporate jet loophole, we have big oil and gas companies, and then we have folks at the very top of the income ladder.

Now I listened to my friend Kevin say they were all small businesses, and as you pointed out, it just isn't true. The joint tax committee has said about 3% of businesses fall in the top category that we're talking about, and those businesses include things -- companies like KKR, Pricewaterhouse, Fortune 100 companies, anyone that files as an S Corporation, so those are good businesses, but these are not mom and pops.

CROWLEY: Let me just in fairness point out, because I looked into this, they are the businesses, those 3 percent that are in there that we're talking about are the ones that create the most jobs, but carry on.

VAN HOLLEN: But what we're talking about here are big businesses. We're talking about any business that files as an S corporation. We're talking about big Washington law firms, we're talking about lobbying firms, and we're talking about things like Pricewaterhouse.

Now good companies, but to say that you're protecting small businesses and mom and pops is just dead wrong, it's counter factual. And I think we should put an end to the myth right now. What they're protecting are big gas companies and corporate jets.

CROWLEY: Their argument is, look, we -- a lot of Republicans say, fine, we think some of these loopholes ought to go but in order to do that we have to have tax reform which we can't get between now and August 2nd. So, if they would agree to that in exchange for some sort of deal that would say we have to have tax reform by date certain, would you go for that?

VAN HOLLEN: Well, we're all for tax reform. We think we should bring down the corporate rate, expand the base. But we think part of that...

CROWLEY: It's part of the price for getting them to agree to do something.

VAN HOLLEN: Sure, but part of that could go to debt reduction. Here's the Republican position, not one penny of closing tax loopholes for special interests can go to deficit reduction, every penny has to go to reducing the rate. Now we saw some hope a little while ago into ethanol rates.

CROWLEY: Do you want to raise taxes? I mean, given, look you know what a lousy jobs report we just got. Do you think it's a good idea to raise taxes on anybody when the jobless rate is 9.2%?

VAN HOLLEN: All the proposals we're talking about would kick in after 2012, number one. Number two, yes, I think it's a good idea to close corporate tax loopholes as part of a deficit reduction plan, because we have got to reduce our deficit to insure long-term economic growth.

We all, I thought, recognize that that's a big, big problem.

CROWLEY: But can you have growth if no jobs are being produced I guess is.

VAN HOLLEN: Well, of course you can't. And we're not proposing that these changes go into effect immediately. We're talking about phased in over a ten-year period, number one. Number two, we all know that during the Clinton administration when you add higher tax rates for the folks at the top, we had a booming economy, 20 million jobs were created, and the rub is this, the most important factor for economic growth are not small changes in the top tax rate. There are many other factors in the economy.

So no, we wouldn't put these changes in place right away. But you have to reduce the deficit. This has got to be part of it.

CROWLEY: What in 2012 the unemployment rate is still high, then would you still want to do it? VAN HOLLEN: Well, I, again, I would close the loopholes for corporate jets sooner rather than later. But in terms of the overall approach, we should also look at the spending side of the equation. In other words, our first principle in all of these talks should be do no harm to the economy. And what's worrisome, is that the Republicans are saying if you don't give us deficit reduction our way, end the Medicare guarantee and slash Medicaid benefits and protect corporate interests, then we're going to allow the United States to...

CROWLEY: Well, that's not in the Biden... VAN HOLLEN: No, but that's in their budget. You heard Kevin McCarthy said they had an answer to this problem. Their answer...

CROWLEY: But in terms of the debt reduction package, they're not asking for that?

VAN HOLLEN: They have never taken that off the table. Let me be very clear, they've never taken that off the table. That is their position. You just heard it from Kevin again. That is their approach to this program. We've said we're not ending the Medicare guarantee. We are willing to have a balanced approach like the bipartisan commission recommended in terms of framework, not every detail. That has to be the way we go forward.

And it's very disappointing that we may lose this opportunity to do something significant on deficit reduction because of this priority of protecting special interest tax breaks.

CROWLEY: If you have to, will you go to the medium deal, as they say, the Biden talks. And if you do, if you can find 2 trillion in tax cuts, will you pass that without anything on the revenue side in order to meet that August 2nd deadline? Do you have to have something on the revenue side?

VAN HOLLEN: We've made it clear as part of the Biden discussions that you have to have a balanced approach to this. And that means ending -- we don't think the oil and gas companies should be getting big subsidies while we're making deep cuts in parts of the budget.

The Republican budget says slash Medicare, end the Medicare guarantee and yet their budget would provide a 30 percent tax break in the rate for the guys at the top.

CROWLEY: But again back to the debt deal here which is the most urgent thing that needs to be done, you all -- meaning Democrats, you think, would allow the August 2nd deadline to pass without a deal if it meant that you had to do only budget cuts?

VAN HOLLEN: Oh, let me be clear, we never said we will hold the United States full faith and credit hostage in the discussions. The president said that's a priority. We need to move forward. If you don't lift the debt ceiling, every economists out there said the economy will tank.

And what is really appalling is to see our Republican colleagues essentially providing a form of extortion, if you don't agree to deficit reduction the way we want it, we're going to put all these jobs at risk because we're going to allow the United States to default on its debt. That's irresponsible.

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CROWLEY: You won't let that happen? So in other words, you would pass just cuts, just spending cuts in order to get a deficit -- VAN HOLLEN: No, no, that's not what I am saying. What I am saying is that we want to do deficit reduction, but we also recognize we have a responsibility to prevent the economy from tanking.

CROWLEY: Meaning raise the debt ceiling?

VAN HOLLEN: I would personally support raising the debt ceiling if we're not able to reach an agreement, I would prefer to reach an agreement, but unlike our Republican colleagues, we're not saying that if we don't get deficit reduction in these talks our way, we're prepared to let the whole economy go down.

CROWLEY: But that won't pass the House as far as we can tell.

VAN HOLLEN: But that's because that's their position. In other words, we're not the party saying that we're going to put the economy and jobs at risk by allowing the United States for the first time in its history not to pay its bills if you don't do deficit reduction our way. We're not taking that position. They are, and their way is, again, slashing Medicare and Medicaid to protect corporate tax breaks.

CROWLEY: But again, not on the debt talks. But let me ask you this as a bottom line question in about half of a minute, how is this going to end?

VAN HOLLEN: Well, we'll have to find out tonight whether the Republicans will reconsider their position. This is a huge missed opportunity for the country to get a significant deficit reduction package in a balanced way. And if they refuse to do that, then we're really back -- not at square one, but we're really -- it's a major setback. Because while we made some progress in the Biden talks, our Republican colleagues are -- they're dreaming if they think we had $2.4 trillion in cuts. We were nowhere close to that. And again, they walked out, because they did not want to take away the tax breaks for corporate jets for the purpose of deficit reduction, oil and gas companies, and folks at the very top.

CROWLEY: But you are willing to go back to the Biden talks if that is where it goes?

VAN HOLLEN: We're willing to solve this problem, but we are not taking the position that we are going to allow the economy to go down the tank and put jobs at risk if we don't get it done our way.

CROWLEY: Chris Van Hollen, congressman, thank you so much.

VAN HOLLEN: Good to be with you.

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