Hearing of the House Rules Committee - H.R. 2560

Statement

Today Maryland Congressman Chris Van Hollen, Ranking Member of the House Budget Committee, delivered testimony at the Rules Committee hearing on H.R. 2560. The legislation -- which would end the Medicare guarantee, cost us jobs and protect tax loopholes for special interests -- would hold our economy hostage by threatening to allow the U.S. government to default on its debt unless the bill's extreme demands on spending cuts are met. Van Hollen's testimony as delivered is below.

"Thank you, Mr. Chairman and members of the committee. I urge you to bring to the floor a piece of legislation that meets two principles. One principle is that the United States pays its debts. It pays its bills and that we shouldn't hold the entire economy hostage by threats that we're not going to fulfill those obligations. I know many people said at one point that Secretary Geithner was cooking the books and they were crying wolf. We have now heard from Standard and Poor's, we've heard from Moody's, we've heard from the U.S. Chamber of Commerce. The reality is that if we do not pay our debts, the United States economy will take a huge hit. We will see interest rates go up. That will hurt every American family trying to make car payments, pay mortgages, and across the board. So it's irresponsible to make demands stating that if we don't get something done 100% our way, we're prepared to tank the economy and threaten lots of jobs.

"And I would point out, because I think there's a lot of misunderstanding about this, that we have to raise our debt ceiling to pay for things that we have already acquired. These are for obligations already incurred. These are for wars the United States is engaged in. This is to help pay for a Part D of Medicare prescription drug bill, which when it was passed in 2005 had no pay-for. This is because of the fact that the revenues coming in are not sufficient to meet our obligations and a good part of that reason is that in 2001 to 2003 we enacted tax cuts that disproportionately benefitted the very wealthy, so that's why there are somewhat fewer revenues coming in, on top, of course, of a very fragile economy. Let's not make that fragile economy worse, number one.

"Number two, I would hope we would take a balanced approach to reducing the deficit and debt. On the Budget Committee, I think there is broad consensus that this is a major challenge for our country. We do have a difference of opinion in how we go about doing it. The President, in fact, has put on the table a proposal that borrows from the framework of the bipartisan Simpson-Bowles proposal -- doesn't accept every deal, but accepts the framework, which says that we will cut three dollars for every one dollar in revenue and proposes to raise revenue by closing a lot of corporate loopholes, ending the subsidies for the oil and gas industry, and asking the folks at the very top of the income scale to go back to the rates they were paying during the Clinton years, a time when the economy was booming and 20 million jobs were created. The problem with the proposal before us is it takes a totally unbalanced approach. And let's make no mistake; this is no garden variety balanced budget amendment. This has a couple of huge twists in it that would essentially write into the Constitution of the United States procedures to enact the Republican budget plan. A plan that ends the Medicare guarantee, slashes Medicaid, cuts education, and protects special interest tax breaks. Why do I say that? Well it's right in here. It's right in here. Under this amendment that would be implanted in the Constitution of the United States.

"In the Constitution of the United States you would need a majority vote to slash Medicare or slash Medicaid. You would need a two-thirds vote -- a two- thirds vote -- to close corporate tax loopholes. You are going to write into the Constitution of the United States a preference for cutting Medicare to beneficiaries who have mean incomes of $22,000. Preference for cutting that over ending subsidies for oil and gas industries -- in the Constitution of the United States. You're going to write into the Constitution of the United States a provision that makes it easy to create special interest tax loopholes. Every Washington lobbyist has been working hard to get a lot of corporate pork barrel into the tax code. Make it easy to do that but hard for reformers to close it. Why? Because by majority vote you can create a new tax loophole but it requires two-thirds vote to shut it down. We'd be writing that in the Constitution.

"The other device in here to ensure that the Constitution is biased toward implementing the Republican budget plan is the cap on 18% expenditures, which is at least what's in the Constitutional amendment that was voted out of the Judiciary Committee. I don't know exactly what will be brought to the floor, but that's the one that has come out of the Judiciary Committee. That sets a cap of 18%. The United States has not hit that cap level since approximately 1966. With the growing number of baby-boomers who are retiring who will be eligible for Medicare and Social Security, putting that cap in guarantees deep cuts to those and other programs.

"So make no mistake, this is a very twisted version of a balanced budget amendment. We keep hearing that 49 of 50 states have balanced budget amendments -- I served in the Maryland legislature and we had to have a balanced budget -- but very few states write in to their founding document, in to their state constitution, a bias in favor of tax loopholes, with respect to their decision-making. And very few write in to their state constitutions a cap based on a percentage of their state economy. So let's be really clear: this is a document that's dressed up like a balanced budget amendment, but it will manipulate the Constitution of the United States to essentially implement the priorities of the Republican budget and that's why I think it is so wrong-headed.

"And I'll end with this, Mr. Chairman. What's really toxic about this proposal is that it ties those two things together. It says, "unless you pass this sort-of twisted version of an amendment to the Constitution, unless you pass that, we're going to allow the United States to default on its obligations. Unless you pass this manipulation of the Constitution, we're not going to let the United States pay its bills, and we're going to let the economy take that hit.' And the American people will suffer as a result. I urge this committee to not take this bill to the floor."

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