Hearing of the House Budget Committee - National Debt and Sequestration

Statement

Today Maryland Congressman Chris Van Hollen, Ranking Member of the House Budget Committee, delivered an opening statement at the first meeting of the Budget Conference Committee. Below are his remarks as prepared for delivery:

"I am pleased that we have finally come together for long-overdue budget negotiations.

"It was just two weeks ago today that we ended the shameful government shutdown and threats to default on our nation's debts. The country has paid a steep price for those reckless actions. Standard and Poor's estimates the shutdown cost our economy $24 billion, and the Peterson Institute has calculated that economic uncertainty caused by constant budget brinkmanship has cost our country 900,000 jobs since the 2010 elections.

"I hope every member of this committee will put away the threats of future shutdowns and default, and focus on efforts to help our economy grow.

"The House Republican and Senate Democratic budgets before us today represent dramatically different visions for America. We will not bridge all the differences, but I hope we can make some progress. That will require some tough compromises. But we must be honest with the public about the nature of our differences. To govern is to choose, and these budgets reflect those choices.

"The primary objective of this negotiation should be to immediately accelerate job growth and place our economy on a stable long-term foundation. The Democratic budget does this by investing in national priorities, replacing the job-killing sequester, and reducing the long-term deficit in a balanced way.

"The Democratic budget provides for vital investments to ensure that America remains the world's economic powerhouse. We allocate resources to put people back to work modernizing the roads, bridges, ports and other infrastructure that forms the backbone of our economy. These investments used to be a bipartisan priority. Unfortunately, the Republican budget assumes very big cuts in our transportation spending -- in fact it would practically eliminate the start of new highway projects as soon as 2015.

"Our budget also invests in our nation's most valuable resource -- our kids -- by boosting support for education, including an early education initiative. The Republican budget resulted in a cut of 20 percent below sequester levels to the education funding bill. These choices have real consequences for our future.

"We also know that the deep, immediate sequester cuts are hurting our economy. The nonpartisan Congressional Budget Office tells us that the meat-ax cuts to defense and national priorities will result in 800,000 fewer American jobs by this time next year. That is a self-inflicted wound that we cannot afford.

"There are smarter ways to achieve equal deficit reduction without economic harm. In the House, I have offered a plan to replace the sequester with a balanced mix of targeted cuts to wasteful spending and cuts to unproductive special interest tax breaks. We have repeatedly been denied a chance to vote on that plan. The ultimate question is what's more important, protecting our military readiness and our national security or protecting certain wasteful special interest tax breaks?

"Finally, we should continue our work to reduce our long-term deficits and shrink the debt. Over the last few years, we have cut the 10-year deficit by over $2.7 trillion, excluding the sequester. Three-quarters of those savings come from budget cuts, and one-quarter comes from revenue. If you factor in the additional trillion dollars in savings resulting from slower-than-expected growth in per capita health care costs, which are due in part to changes in the Affordable Care Act, the ratio of cuts to revenue is more than 4 to 1.

"Still, we can and should do more. But there are dramatic differences between how our budgets address the long-term deficit challenge. The Democratic budget adopts the balanced approach recommended by every bipartisan group, with a combination of targeted savings in mandatory spending programs and cuts to tax breaks enjoyed by millionaires.

"The Republican budget takes a very different approach. It drops the tax rates for millionaires by over one-third, providing a huge windfall to the top 1 percent. At the same time, the Republican budget violates important commitments to our seniors and the most vulnerable and it guts vital investments. In short, it gives the very wealthy a windfall tax break at the expense of everyone and everything else.

"It will be difficult to bridge these differences. Any agreement will require difficult compromises. We cannot start these talks by taking things off the table, and we can't be serious about reducing the deficit and then refuse to close a single tax break to help reduce that deficit. It is hard to make progress when some people think compromise is a dirty word.

"Finally, I would like to mention a policy change that would immediately help grow the economy, reduce our long term budget deficits by hundreds of billions of dollars and strengthen social security. That change would be the bipartisan Senate immigration reform bill. We could pass that today if the Speaker would simply allow us an up or down vote in the House of Representatives.

"We simply need a willingness to compromise and allow democracy to work its will."

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