Sequester Replacement Reconciliation Act of 2012
Floor Speech
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Mr. VAN HOLLEN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, there's agreement here on two things: one, we need to reduce our long-term deficits--the question is not whether we need to do that, but how; second, we agree that the automatic, indiscriminate, meat-ax cuts scheduled to begin next January are the wrong way to reduce the deficit. We need a responsible alternative.
Now, the House Democrats put forward a budget, as did the President, that deals with this issue over 10 years in a balanced way, building on the more than $1 trillion of cuts we already made on a bipartisan basis last August, and including additional cuts, but also cutting tax loopholes that benefit special interests, and asking people who make more than $1 million per year to help a little bit more toward deficit reduction. That is the kind of bipartisan approach that's been recommended by bipartisan groups like Simpson-Bowles and Rivlin-Domenici. Unfortunately, the Republican approach to the budget--and now to the sequester issue--takes this lopsided approach.
Now, let's remember, 98 percent of our House Republican colleagues, while they come down here and talk about how we have this big deficit and debt problem, they have signed a pledge that says we're not going to ask for one penny of additional contribution from people making more than $1 million a year to help reduce our deficit, not one penny. We won't take one penny of taxpayer subsidies away from the big oil companies to help reduce the deficit.
And the math is pretty simple after that. If you say from the beginning you're not going to ask people making $1 million a year to help do a little more to reduce our common deficit, if you say you're not going to ask companies that have these tax loopholes that actually incentivize them to ship jobs overseas to pay a little bit more, what do you do? Your budget has to whack everyone else, and that's what it did. That's why their budget ended the Medicare guarantee. That's why they cut $800 billion from Medicaid--two-thirds of Medicaid spending goes to help seniors and disabled people in nursing homes. That's why they slash vital investments in education, research, infrastructure, things that had been bipartisan investments to help our economy grow. That's what they did then.
And now on this sequester proposal, what do they do? The chairman talks about eligibility. These are people who are eligible to get food and nutrition assistance because they're struggling. The nonpartisan Congressional Budget Office, which is our referee around here, has told us what the real-world consequences of their proposal before us today would be. Over 22 million households with kids would see their food and nutrition support reduced; 300,000 kids knocked off the school lunch program; 300,000 kids knocked off the Children's Health Insurance Program. Those are the kinds of choices they make because they refuse to take a balanced approach to this deficit issue.
Now, I want to say one word about defense spending. Last August, as part of the bipartisan Budget Control Act, our Republican colleagues deliberately chose to expose defense spending to deep additional cuts rather than ask millionaires and big corporations to share a greater responsibility for paying for our national security. Now our Republican colleagues are on the floor today saying these defense cuts would devastate our national security; but they still, even today, apparently aren't concerned enough about the impact of those cuts on national security to ask millionaires to pay a little bit more for our common defense. That's the same kind of mentality that led us to put two wars--Iraq and Afghanistan--on our national credit card. Even as we asked our soldiers to sacrifice, we said we're just going to put that on our national credit card.
So there's a fundamental question here: If you're so concerned about those cuts to defense, why is it you won't close one special interest tax loophole to help pay for them?
We, the Democrats, had a substitute amendment that we would have been able to debate and vote on right here today. We took an alternative approach. We also prevented those defense cuts. You know how we did it? We said we don't need to make these big agricultural subsidies in direct payments. We also don't think we should have taxpayer subsidies for the big oil companies. We did it in a different way. Apparently, our Republican colleagues are kind of worried about what we were going to propose because they brought a closed rule to the floor, meaning Democrats didn't have an opportunity to get a vote on our alternative.
I reserve the balance of my time.
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Mr. VAN HOLLEN. Mr. Speaker, before I turn to one of my colleagues, let me say in response to my friend Mr. Hensarling that the American people are well aware of what was happening to the economy the very day the President was sworn in as President of the United States: losing 800,000 jobs every month, the economy in free fall, almost 9 percent in negative economic growth. People's retirement savings had dropped by one-third compared to where they were in 2007. That's the economy the President inherited.
As a result of the extraordinary measures taken by the President, by the previous Congress and, most importantly, with the fortitude of the American people, what we see is this. After the day the President was sworn in and when the economy was in free fall--those were jobs lost--we began to lift ourselves slowly out. We have now had 25 consecutive months of positive private sector job growth.
Is it enough? No. Of course, we had no help from our Republican colleagues in working on the turnaround. The President's jobs bill that he submitted to this House last September is still sitting here. Fortunately, we finally did a piece of it with the payroll tax cut.
My Republican colleagues say they have an answer. Their answer is back to the old trickle-down economics: another round of tax breaks for the folks at the very top, and somehow that's going to trickle down and lift everybody up.
Do you know what? We tried it. It didn't work. It was called 8 years of the Bush administration. We had two back-to-back tax cuts at the end of the 8 years, a net job loss in the private sector after those 8 years, and we had big deficits. The last time we had a balanced budget here was in 2001, which was before those policies. So it is important for us to get the history of the past right in order to make sure we know how to move forward properly in the future.
I now yield 2 minutes to the gentleman from Oregon (Mr. Blumenauer).
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Mr. VAN HOLLEN. Mr. Speaker, I would just point out that the nonpartisan Congressional Budget Office
has stated that as a result of the economic recovery bill and the extraordinary actions that were taken, over 4 million jobs were created or saved. That means a lot to the people who didn't lose their jobs and to the people who were losing their jobs at the rate of 800,000 per month when the President was sworn in. Are we where we want to be? Of course not. Are we a lot better off than we were? We're pulling ourselves up. The last thing we want to do is go back to where we were.
Nobody on the Democratic side has said we can deal with this on the tax side alone. I keep hearing that. It's just not true. We just voted on a bipartisan basis in August for a trillion dollars in cuts. What we propose is what every bipartisan group that has looked at this challenge has said: you have to do this through a combination of cuts, but you also have to get rid of all that pork-barrel stuff in the Tax Code and use some of that to reduce our deficit. Ask the folks who have been making over a million dollars a year to help pay more for our common defense. That is just common sense.
With that, I yield 2 minutes to the gentleman from Texas (Mr. Doggett).
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Mr. VAN HOLLEN. Mr. Speaker, I also urge all our colleagues to support our troops and support our military, and the Democratic substitute that we offered would have made sure that the sequester on defense spending did not take place.
I have great respect for the chairman of the Armed Services Committee, Mr. McKeon, who just spoke. Here's what he said not long ago. He said:
We need to address our budget problems comprehensively, through smarter spending and increased revenue.
He also said:
If it came that I only had two choices, one was a tax increase and one was a cut in defense over and above where we already are, I would go to strengthen defense.
In our Democratic substitute, we said let's close some of those tax loopholes to generate a little more revenue to help pay for defense; let's ask people who are making over a million dollars a year to get rid of some of their tax breaks to help pay for our common defense so that we don't have to have a budget that whacks everybody else in the country. That's what the chairman of the Armed Services Committee said. I agree with him. He got beaten down by many in the Republican Party after he made those comments with them saying, oh, you violated that pledge that says we're not going to raise one more penny of revenue to reduce the deficit. But he was candid.
Unfortunately, neither he nor any one of us are going to have a chance to vote on the Democratic substitute that makes sure that we don't have the defense sequestration. We just do it in a
balanced way, through cuts as well as closing some of these tax loopholes.
I now yield 2 minutes to the gen tle lady from Florida (Ms. Castor).
Ms. CASTOR of Florida. I thank the ranking member.
Mr. Speaker, two of the most prominent independent scholars on Congress, Thomas Mann and Norm Ornstein, recently completed a detailed research initiative. They've never been shy in criticizing either side of the aisle. But their latest research concluded that the Republican Party has become ``ideologically extreme; scornful of compromise; unpersuaded by conventional understanding of facts, evidence, and science.'' And they said:
When one party moves this far from the mainstream, it makes it nearly impossible for the political system to deal constructively with the Nation's challenges.
The Republican budget is a perfect example of that. The Republican budget shields special interests from participating in deficit reduction, and instead says, We want to end Medicare as we know it. We target children and our older neighbors and middle class families for the overwhelming burden of deficit reduction.
If a political party wanted to undermine the health and economic security of millions of American families, well, then, this is the way to do it. And it's too bad, because I believe Democrats and Republicans agree on the need for deficit reduction, but we have starkly different visions on how to get there. Others have called this Republican budget extreme, reverse Robin Hood, destructive, and a threat to middle class security.
And here's an example. In the Budget Committee, I offered an amendment to say, It's time. We don't have the luxury to be giving big oil companies tax breaks any longer. Instead, let's make sure that children across America can see a doctor, can get the immunizations that they need. But what was the vote? The Republicans rejected that commonsense amendment. It was paid for by eliminating these Big Oil subsidies.
This is what Thomas Mann and Norm Ornstein mean by they are ``ideologically extreme.'' It's not in keeping with our values, as Americans. And I urge my colleagues to vote ``no'' on the Republican budget and sequestration plan.
Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself 30 seconds to make three points.
That line the gen tle lady used about Medicare was rated the ``lie of the year'' in 2011 by PolitiFact. Number two, the reason the Democratic substitute is not being considered is because it violates the House rules. What's interesting about that is, it would have violated the House rules that the Democrats had when they were in the majority. The third point is, when it comes to tax loopholes, we're proposing to close those tax loopholes in order to lower tax rates for American families and businesses to create jobs. They want to do it to prevent spending cuts; $3 of tax increases for $1 of spending cuts is the math and the logic that the other side chooses to use. When you have a spending problem, you've got to cut spending.
With that, Mr. Speaker, I yield 5 minutes to the gentleman from Oklahoma (Mr. Lucas), the chairman of the Committee on Agriculture, and ask unanimous consent that he be allowed to yield time.
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Mr. VAN HOLLEN. Mr. Speaker, I yield myself such time as I may consume.
First, I would just like to respond to the chairman of the Budget Committee and point out that the Rules Committee waived three rules to bring the Republican legislation to the floor. It couldn't waive one rule to allow a Democratic substitute to have an up-or-down vote. And the one rule you wouldn't waive is the one that rigs the process against closing special interest tax loopholes.
To the chairman of the Agriculture Committee, I think everybody needs to know that the Ag Committee didn't reduce one subsidy to ag businesses--not one. Even though the overall Republican budget says it should be $30 billion, there's a bipartisan bill that would do that, but not one. Instead, they took $33 billion out of food and nutrition programs.
Now, we should be very clear on this. People say that they're going to make sure that everyone who's eligible to get food stamps will. And then they say, under SNAP, suggesting that there are a lot of people who are getting it who are cheating. That's not true. All those other people are eligible. They're eligible.
And it's not Democratic scare tactics saying all these people are going to lose their access to food and nutrition programs. It's the nonpartisan Congressional Budget Office, the referee here, that was never contested by our Republican colleagues in the Budget Committee. They say 22 million American households with children will see their food and nutrition support reduced; 2 million Americans, approximately, will lose all access to the food and nutrition programs through SNAP; 300,000 kids will lose the school lunch program. Those aren't our facts. That's what the Congressional Budget Office says.
With that, I yield 2 minutes to the gen tle lady from Oregon (Ms. Bonamici).
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Mr. VAN HOLLEN. Mr. Speaker, I yield myself such time as I may consume.
I know it makes our Republican colleagues feel better when they pretend that these cuts don't harm real people, but the reality is they do harm real people, and the cuts that were made in Energy and Commerce will mean that 300,000 children will no longer get health care throughout the Children's Health Insurance Program. That's not my fact. That's from the nonpartisan Congressional Budget Office.
We have heard a lot about the fact that cuts to the prevention fund to help provide for healthier starts, that won't have any impact. We hear these stories coming up. I would just like to put in the Record information from the Centers for Disease Control that refutes this urban legend that somehow these funds were used to spay or neuter dogs. These things just aren't true.
The reality is that it will mean 326,000 women will not get breast cancer screenings and 284,000 will not get cervical cancer screenings. That's what happens when you zero out the prevention fund.
CDC Analysis: Energy & Commerce Committee's Press Release Regarding Communities Putting Prevention to Work
BACKGROUND
CDC carefully monitors grantee activity for appropriate use of Federal funds, and to ensure that investments are directed to evidence-based interventions that make a difference in health.
CDC continues to review all reported allegations regarding grantee activities.
CDC has not found among these examples any instance in which the anti-lobbying prohibitions have been violated. Many allegations relate to activities that were performed by outside organizations not using federal funds, or activities that actually took place before CDC funding was even awarded to the grantee. Other activities are, in fact, permissible under the restrictions, such as educating the public on health risks.
See below for information on CDC's Communities Putting Prevention to Work program, which was primarily funded in FY 2009 with funding from the Recovery Act.
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Mr. VAN HOLLEN. Mr. Speaker, it is serious, and the Democratic substitute proposal would have prevented those cuts from going across the board in defense, as well as the non-defense part of the budget. Unfortunately, our Republican colleagues don't think it is serious enough to ask oil companies to do without taxpayer subsidies to help cover the cost. They apparently don't think it is serious enough to ask people making $1 million a year to help with our deficit reduction to pay for the military that we have.
I yield 2 minutes to the ranking member of the Financial Services Committee, Mr. Frank, to talk about some of the impact of this on taxpayers.
Mr. FRANK of Massachusetts. Mr. Speaker, the Republican approach does some cutting, but it does even more shifting. I agreed with The Wall Street Journal editorial of a few weeks ago, which praised the gentleman from Wisconsin because he was shielding the military from any significant cuts and, instead, was making it up from Medicare and Medicaid. That's The Wall Street Journal, Mr. Murdoch, thanking the gentleman from Wisconsin for cutting Medicare and Medicaid, not to balance the budget or reduce the deficit, but to pump up military spending.
Similarly, this claim that they are saving $20-some-odd billion in dealing with the liquidation authority is exactly wrong. What the Republican approach says, and we have a roll call vote in our committee which did this, it continues their position that the large financial institutions, financial institutions with more than $50 billion in assets, should pay nothing--nothing--for the costs of cleaning up the mess.
In our original bill in 2010, we met CBO's requirement that there be a $20 billion cost by assessing the large financial institutions. To get cloture in the Senate, three Republicans managed to back off. In our committee this year, the Republicans said, We don't like this, and it's going to cost $20 billion. CBO, by the way, says that it costs $20 billion only within the 10-year window. CBO said the $20 billion will be paid out, and it will be repaid by the large financial institutions. I will submit another article from The Wall Street Journal making that point.
But here's what the Republicans did: they said, Let's not have the financial institutions be vulnerable. We looked at what CBO said, and we said, okay, CBO says the $20 billion from the financial institutions will come at the end of the 10 years rather than the beginning. So we had an amendment to assess the large financial institutions $20 billion--$29 billion, the CBO said it would cost--at the beginning of the period. The Republicans said the banks were being overtaxed and voted it down on a party-line vote.
[From the Wall Street Journal, Apr. 18, 2012]
Would Repeal of Key Dodd-Frank Provision Really Save $22 Billion?
A House committee later today will vote on a bill being pushed by Republicans to repeal a central plank of the 2010 Dodd-Frank financial law, claiming it would save taxpayers $22 billion over 10 years.
The figure triggered some head-scratching around Washington. ``It's tough to understand where the $22 billion comes from--it's a wild assumption since there are currently no cash flows involved with this part of Dodd-Frank,'' Brian Gardner, a Washington analyst with investment bank Keefe, Bruyefte & Woods, in a note to clients. (He's a former GOP Hill aide). ``Republicans on the committee would only eliminate the possibility that the government might have to spend money on liquidating a distress financial firm in the future,'' he wrote, adding that investors shouldn't waste any time thinking about the issue since the GOP bill ``has virtually no shot at passing'' the Senate.
The provision in question is the so-called ``orderly liquidation authority'' that gives regulators broad new powers to take control of faltering megafirms and wind them down in an orderly way so that their failure doesn't wreak havoc on the broader economy a la 2008. The provision does allow the Federal Deposit Insurance Corp. to borrow money from the Treasury to finance the process--but that money, by law, has to be paid back to Treasury. If the FDIC can't recoup enough by selling off assets of the failed firm, then regulators will levy a fee on the big financial firms left standing over a five-year period.
House Republicans say they got the $22 billion figure from the nonpartisan Congressional Budget Office. Looking at that office's 2011 cost estimate for the whole Dodd-Frank bill shows how the CBO came up with the number--and the budget quirks behind it that make it far from a tangible boost to government coffers.
First, the CBO assumes regulators have to step in and use their new powers to deal with a teetering financial giant during the next 10 years. That's a pretty big if. Nonetheless, as CBO puts it, while the likelihood of the feds having to use this new process in any year ``is small, the potential costs of liquidating a systemically important firm could be large.'' And experts do say there will be another financial crisis sooner or later.
Even so, the CBO's approach of only looking at 10 years at a time is another quirk at play here. As the agency explained in its 2011 document, ``[A] snapshot of cash flows in any given 10-year budget window is unlikely to net to zero because the spending to liquidate a firm would occur before the income was received to cover those costs.''
In other words, the CBO is assuming that the FDIC won't be able to get all the money it needs to pay back Treasury within the 10-year period--but that doesn't mean that the FDIC won't ever get that money. If the law works as it is supposed to, in the end the total cost to taxpayers would be zero--not $22 billion.
Of course, there are lots of critics who say that this new resolution authority won't work and either regulators or Congress will decide to bailout financial firms when the next crisis strikes, in which case taxpayers would be on the hook. But the CBO is assuming the law works like it's supposed to.
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Mr. VAN HOLLEN. Mr. Speaker, I yield myself such time as I may consume.
We keep hearing from our Republican colleagues that there's nothing more important than making sure we defend our national security. We agree that that's essential. We also agree that we need a strong economy. What's confusing is, if that's so important, why are our Republican colleagues refusing to ask the big oil companies to give up their big subsidies? They've said they don't need them.
So, Mr. Speaker, again, we also keep hearing that these cuts aren't going to have an effect. There's the old saying that you're entitled to your own opinions, but not your own facts. What we've been talking about are facts from the Congressional Budget Office about the number of kids that would lose their health care and the number of struggling families that would lose their food and nutrition support.
I now yield 1 minute to the gentleman from Puerto Rico (Mr. Pierluisi).
Mr. PIERLUISI. Mr. Speaker, I strongly oppose the provision in this legislation that would single out the Medicaid programs in the U.S. territories for a 65 percent cut, even though the territories are already treated in a profoundly unequal manner under this program. I'm joined in my opposition to this cut by the Republican Governor of Puerto Rico, Luis Fortuño, who knows discrimination when he sees it.
And I'd like to remind the gentleman from Wisconsin that in the case of the territories, we are talking about an actual cut. We're not talking about a reduction in the growth of our funding, because we have a cap to live with.
Just as we fought to obtain the funding that this bill now seeks to repeal, we will fight alongside our allies in the White House, the Senate, and this Chamber to retain this funding. This is a fight we intend to win.
Mr. RYAN of Wisconsin. Mr. Speaker, I yield 5 minutes to the gentleman from California (Mr. Issa), chairman of the Oversight and Government Reform Committee, and ask unanimous consent that he be allowed to yield time.
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Mr. VAN HOLLEN. Mr. Speaker, I appreciate the words the chairman of the Government Reform Committee said with respect to Federal employees.
If you listen to the comments of a lot of these colleagues, they have made Federal civil servants scapegoats, and, in fact, their budget that's before us today does hit Federal employees.
So the folks in the intelligence community who helped track down Osama Bin Laden, what do they get under this proposal? A 5 percent pay cut.
How about the folks at NIH who are, every day, looking to find cures and treatments for diseases that plague every American family? A 5 percent pay cut.
How about the nurses who work in the Veterans Hospitals? A 5 percent pay cut.
And yet, you don't cut the direct payment subsidies to agriculture. You don't cut the subsidies to the big oil companies. You just want to whack Federal civil servants.
With that, I yield 2 minutes to the gentleman from Maryland (Mr. Hoyer), who has been working on this issue for a very long time.
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Mr. VAN HOLLEN. Mr. Speaker, I yield 2 minutes to the distinguished ranking member of the Ways and Means Committee, the gentleman from Michigan (Mr. Levin).
(Mr. LEVIN asked and was given permission to revise and extend his remarks.)
Mr. LEVIN. Mr. Speaker, this bill is vivid evidence of the radicalization of the Republican Party.
I recall decades ago chairing a committee in the Michigan State Senate
and addressing a number of reforms affecting the lives of working men and women. I directly engaged in give and take and negotiated final legislation with Governor George Romney, resulting in legislation that passed on a bipartisan basis.
Today, the radicalization of the Republican Party would make that impossible. Instead, we have a bill that would take away food stamps for 2 million Americans, children, working parents, and seniors. It would threaten 280,000 school meals and end the Social Services Block Grants, which provide home care, transportation for individuals with disabilities, protection for abused children, and Meals on Wheels. All of this and much more extremism to carry out an additional tax cut of $240,000 for the very wealthiest 1 percent of taxpayers.
We can turn off the budget sequester and the damaging across-the-board cuts, but not with this extreme partisan bill. The House leadership refuses to follow a bipartisan path. This bill is sad proof of how the Republican Party of today has moved dramatically to the extreme, leaving behind most Americans, except the very wealthy.
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Mr. VAN HOLLEN. Mr. Speaker, we're still waiting for this House to take up the President's jobs bill that was submitted last September. We've seen 25 consecutive months of positive private sector job growth. It was a whole lot better than where we were in January when the President was sworn in, losing 800,000 jobs a month. But we need to sustain that recovery, and we're still waiting. The clock is ticking. Let's take that legislation up so that we can accelerate the recovery.
With that, I yield 2 minutes to the gen tle lady from Texas, representing the ranking member of the Judiciary Committee, Ms. Sheila Jackson Lee.
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