CNN "Erin Burnett Outfront" - Transcript
Interview
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Chris Van Hollen of Maryland is the top Democrat on the House Budget Committee and he joins me tonight and good to see you, sir.
REP. CHRIS VAN HOLLEN (D), MARYLAND: Good to see you, Erin.
BURNETT: The Fed chairman was pleading with you guys today. I mean he really was pleading. Are you all still counting on some level though that the Fed could sort of bail Congress out, do something else, some more quantitative easing so that Congress doesn't have to act this summer?
VAN HOLLEN: No, we're not counting on that, Erin and Ben Bernanke is exactly right, Congress should get its act together. It needs to get its act together to both prevent the fiscal cliff, which would hurt the economy, and also come up with a long-term plan to reduce the deficit. So we also deal with that long-term issue. There are bipartisan models for how to do this that have been put forward by groups like the Simpson-Bowles group. I think that's a good framework. So the path toward getting there is clear. The political will, unfortunately, has not been there.
BURNETT: And it has seemed to come down very explicitly to this issue in the near term, and obviously this is a piece of the grand bargain, but to this issue of the Bush tax cuts and whether they go away for everyone or stay for everyone or only stay for some people and go away for the wealthier, who would receive a tax increase. Now, this is a crucial issue. And some of the people on the other side of the debate from you, on the Tea Party, the ones who don't want to raise taxes at all and have made this a religion have started to compromise. Two of the most ardent Tea Party members, Mike Lee and Rand Paul on this show just in the past few days have both said this, and here they are.
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BURNETT: Intellectually, though, and this is an important intellectual point, you're all right with some people, all in, they may end up paying more than they're paying now but you get a simpler tax code and a simpler rate but they could pay more, some people.
SEN. RAND PAUL (R), KENTUCKY: Absolutely. Absolutely.
BURNETT: Are you also open to a system where by eliminating loopholes, which I know in your own budget you say you're for some people in this country would ending up paying more in taxes after the reform than they do before?
SEN. MIKE LEE (R), UTAH: Yes and what we need is a flatter, simpler, fairer tax system.
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BURNETT: Why isn't that enough? Why can't you guys do a deal if they're saying that on one side? Why can't you do a deal?
VAN HOLLEN: Well Erin, if what they're talking about is really a change in the tax code in a way recommended like bipartisan groups and Simpson-Bowles which not just simplifies it by reducing the rate and expanding the base but would also generate real new revenue that would be matched by cuts, then certainly we could do something. I would welcome other --
BURNETT: But hold on, because obviously what you're saying there --
VAN HOLLEN: Yes.
BURNETT: -- you just obviously got right to the heart of it, OK. What do you mean when you say so if I cut the rate but I eliminate loopholes, a lot of people in this country, and I'm talking about the wealthy, will pay more. You're saying that's not enough. You want additional new revenue?
VAN HOLLEN: No, I'm saying if you cut the rate and broaden the base in a way that generates additional revenue and maintains the progressivity (ph), which is what Simpson-Bowles and other groups have proposed, that would be an important way forward. I do not believe that our Republican colleagues have put that on the table. I can certainly tell you, Erin that in the House that is not the case because that is a strict violation of the so-called Grover Norquist pledge which has been signed by 98 percent of the House Republicans. So I have not seen --
BURNETT: But he said -- OK, but he has said you know to me and to others that if you simplified the tax system, an overhaul, he would get rid of loopholes and that the wealthier would pay more. Now, he obviously thinks all in we shouldn't get more revenue which is different than some of these other guys, but he's still for the wealthier paying more.
VAN HOLLEN: The issue is taking a balanced approach to deficit reduction, which means combining cuts with additional revenue. That's what Simpson-Bowles did. That was their framework. If that's what the Republicans in the Senate are proposing, it would be great to see their plan. I have never seen a proposal put forward by Republicans in either the House or the Senate that does that at all. So I would welcome that. If they said that to you on the show and they mean it and want to follow through, I'm happy to call them tomorrow to find out if that's what they meant.
BURNETT: Well, let me talk about something that -- I mean they're obviously talking specifically about closing loopholes. I mean I think it's clear what they're saying, which I think is different than you're saying additional -- additional revenues. But there's something just, you know, existentially important here and I think NPR planet (ph) money did a great job when they did this analysis. If you tax people in this country who make over a million dollars at 100 percent, you get $700 billion to one shot, then you can't tax them again. The debt burden in this country is $15.6 trillion. If you increase taxes on the middle class by eight percent, you'd get more than taxing the wealthy at 100 percent. If we can't be honest about the math here, how can we have an honest conversation about raising taxes on any specific group?
VAN HOLLEN: Well, the math you just pointed to is why we need to do a combination. A combination of revenue increases by eliminating a lot of these tax loopholes, and maintaining progressivity (ph), but also cuts. Remember, that as part of the Budget Control Act, we've already cut a trillion dollars over the next 10 years. What we need to do is find additional cuts and the revenue piece. But Erin, again, I welcome the statements that were made on your show. I really hope that what they are agreeing to do is violate the so-called Grover Norquist pledge, which would be absolutely necessary to putting together a balanced approach and that's what we need to do.
BURNETT: But just to make sure that I understand where you're coming from to try to see if there really is common ground between where you are and where they are, when you say additional revenue, would you be saying, look, we keep a tax rate where we have two levels or three levels or whatever it might be, progressive, but if I close loopholes so the wealthier end up paying more. I'm not looking for additional new taxes that I'm going to introduce on anybody. Is that a place you would compromise?
VAN HOLLEN: Well, there could be additional taxes with respect to folks who are at the higher end under that proposal. I mean if you look at Simpson-Bowles, depending on where your deductions are, you would see additional revenue. For example, under the "Buffett Rule", which the president has proposed, you would generate additional revenue from people over a million dollars. If you also look at some of the international corporate tax loopholes, you can also generate additional revenue. That's part of the president's budget proposal --
BURNETT: Right.
VAN HOLLEN: -- that he submitted to Congress. It's also part of the House Democratic alternative budget.
BURNETT: OK. One quick thing though, the "Buffett Rule" --
VAN HOLLEN: Sure.
BURNETT: I mean isn't it a little bit ridiculous to talk about adding in new rules when you just -- it kind of looks like you're avoiding the whole problem. I'm not saying you, but in general Congress, instead of reforming the system, go throw this tax at this person, at that person, at this person and that person, instead of just you know fix it and then see how much money you need?
VAN HOLLEN: Well, I think the "Buffett Rule" can be incorporated into a larger tax reform piece. I mean at its root, the "Buffett Rule" of course simply says that folks making over a million dollars should be paying the same effective rate as other Americans who are usually working -- BURNETT: But you could get that --
VAN HOLLEN: -- for those folks.
BURNETT: -- if you simplify the rate and got rid of loopholes --
VAN HOLLEN: Well --
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BURNETT: I mean --
VAN HOLLEN: You can do it in part but the "Buffett Rule" is a back stop. The "Buffett Rule" is a back stop that says even after all those deductions, it's just simply fair, to make sure that folks at the very high end are paying a similar effective rate. But look, to get to your overall point, I think it's very important that we work together to avoid the fiscal cliff. One way to do that would be to extend the middle class tax cuts immediately, in fact for 99 percent of the American people and replace the sequester with a balanced approach to deficit reduction. What's not helpful are the kind of comments that you heard when you were here in Washington from Speaker Boehner who was threatening that the United States will not meet its financial obligations unless we adopt the kind of austerity measures that we've seen in Europe that have been a failure. That is the wrong approach. It undermines confidence and then will slow down the economy when you generate that kind of uncertainty.
BURNETT: All right. Well sir, thank you very much. Appreciate it. Representative Chris Van Hollen and here by the way is a show that is rooting that we don't have any more back stops. Solve the real problem. No more "Buffett Rule", this, that, come on.
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