Hearing of the House Budget Committee - The Long-Term Budget Outlook

Hearing

Today Maryland Congressman Chris Van Hollen, Ranking Member of the House Budget Committee, made opening remarks at the House Budget Committee hearing on the Congressional Budget Office's (CBO) Long-Term Budget Outlook. Below are his remarks as prepared for delivery:

"Thank you Mr. Chairman. And thank you to Director Elmendorf for coming before us again today.

"Before we get into the long-term outlook for our budget, I think it's important to note the progress we have made so far on the deficit. In recent years, Congress has acted to reduce projected budget deficits by more than $3 trillion, with more than three-quarters of these savings coming from spending cuts.

"Actual deficits have fallen dramatically, from $1.4 trillion in FY2009 to less than $600 billion today, and are expected to continue shrinking as a share of the economy in the near future. But, as CBO's report makes clear, the deficit will begin growing again in the long term.

"The question has never been if we need to reduce the long-term deficit -- it's how.

"This report reaffirms the fact that the only rational way to tackle our long-term deficit is through a balanced approach -- something President Obama and Democrats have been proposing for years, just to be rebuffed by Congressional Republicans at every turn. In fact, the GOP continues to refuse to close a single special interest tax loophole for the purposes of deficit reduction while voting to put billions of dollars on the national credit card to provide further tax breaks to big corporations.

"This year, the House has already passed more than $500 billion in unpaid-for tax cuts, with $300 billion more waiting for floor action. They have not paid for a single penny of this spending, choosing instead to pass the cost of these corporate tax breaks onto future generations. This also violates the Republicans' own budget, which assumes any new tax cuts will be fully offset.

"Given the majority's unwillingness to take a balanced approach, we need to focus on what we can do in the current climate. The most effective way to reduce our long-term deficit is to build a strong economy. We need to put Americans back to work and create jobs with good wages.

"We've made progress on this critical issue, with 288,000 jobs added to the economy in June and 52 consecutive months of private sector job growth totaling 9.7 million new jobs. But we must do more. That is why investing in our national infrastructure, raising the minimum wage, and passing comprehensive immigration reform are so important to creating good-paying jobs for hardworking Americans.

"In the long-run, immigration reform would reduce budget deficits by about $900 billion over the next 20 years and increase the economy by about 3.3 percent in a decade and 5.4 percent over two decades, according to previous CBO analysis. That would go a long way towards addressing the problems CBO outlined in yesterday's report.

"I would also note that the long-term outlook for health care spending has improved in recent years. CBO's projection of federal health care spending in 2039 has fallen by nearly one-fourth over the last five years, from 10.5 percent of GDP in its 2009 projection to 8 percent of GDP in the new estimates.

"This isn't the time to reverse course on health care policy. We need to be very careful to avoid taking steps that might reverse this promising trend.

"There is no question that Congress should be working day and night to grow the economy and get our fiscal house in order over the long term. But all we've seen from Congressional Republicans is governing by creating crises through government shutdowns, forced sequesters, and even threats to push the United States into default. Another attempt to create a debt limit crisis next spring could be disastrous.

"At a bare minimum, I hope the majority will agree to do no harm to our long-term fiscal outlook. I urge them to join in our fight to grow the economy for the middle class and address issues with our long-term deficit that CBO has outlined in this report in a balanced way."

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