Transcript: Rep. Chris Van Hollen remarks on Paul Ryan’s budget at NH Politics & Eggs
Transcript of remarks by Rep. Chris Van Hollen (D-Md.) on Paul Ryan’s budget at the Politics and Eggs breakfast in New Hampshire on Aug. 15, 2012:
“It really is a privilege to be up here in the Granite State in New Hampshire at what we all know is a pivotal moment in the presidential election and other elections that are taking place, which presents a very clear choice for all of us.
“And I know from my own state of Maryland and from my travels around the country, including in New Hampshire, that the American people are fair and that they will examine the facts and that they will very clearly examine the choice. And I know New Hampshire given its unique role in the presidential selection process takes those responsibilities very seriously. So I’m very privileged to be with you here this morning.
“Now, I do believe that the choice in the presidential election has come into much sharper focus since Mitt Romney – Gov. Romney – selected Paul Ryan as his running mate. And I should say at the outset – and Larry indicated this, Jim indicated this – the personal relationship that we have is a very good one. We get along well.
“We have, however, very, very deep and fundamental differences on where we should go in this country.
“The good news is, I believe, in the Budget Committee and on the floor of the House, we’ve been able to express those differences in a civil manner, in a way that I think has sharpened the debate and elevated the debate and made the choices more clear.
“And I very much hope that as we head into the final days of this election that we will focus on those choices that are before us, focus on very deep policy differences.
“Because I fundamentally believe that when you examine the Ryan – and now the Ryan-Romney – plan that you will discover that it is simply returning to a failed trickle-down economic strategy – a strategy that we tried during the Bush administration, which crashed against the hard wall of reality. Because after those 8 years, we in fact had lost net private sector jobs and, of course, the deficit was skyrocketing.
“And if you look at the Ryan-Romney plan, it does provide these big tax breaks to folks at the very top on the theory that somehow the trickle-down effect will boost everybody and lift all boats. And that simply did not happen. So I don’t know why we’d want to return to that approach.
“So let’s just review the facts, and I think it’s important to start at the beginning of the last 4 year story. Because we all know that the day the President was sworn in, he inherited a huge financial and economic mess. There can be no disputing that fact.
“And let’s just review some of the specifics because we know at that time that the economy was in total free fall. Over 800,000 Americans were losing their jobs every month. The GDP was plummeting down toward Great Depression levels at a negative 8% GDP rate. That is spiraling downwards. If you compare Americans’ retirement savings from the Fall of 2007 to the time President Bush had left office, their value had collapsed by one-third – these are retirement savings, 401K plans.
“So that’s what the President walked into and I should say it’s a very good thing that we did not take the advice of former President Bush and Paul Ryan to privatize Social Security. Because the reality is had we made that choice that they were strongly advocating, there would have been millions of Americans who were put at total economic risk at the time of the collapse of the economy.
“And I’m glad that we didn’t roll the dice and take that chance with seniors at that time because millions of seniors rely entirely on Social Security, millions more have Social Security as their primary source of income. And yet when you have that collapse in the 401K side of the retirement system, that’s all many people could have fallen back onto. So if you’re also rolling the dice with that, people would have been in great jeopardy.
“So that is the situation that the President inherited and he acted very quickly – acted very quickly. In the face of that economic collapse, he worked with the Congress – a Democratic Congress at the time – to pass an economic recovery bill. He worked with the Congress to rescue the auto industry and American manufacturing. He took those steps immediately, and the results were good.
“Now, we all know that we have a long way to go in the economy but let’s just review the results as determined by the non-partisan Congressional Budget Office. Because on the Budget Committee, we have a lot of back and forth but there is a referee. And the referee is this agency called the Congressional Budget Office, and they’re called upon as professionals to examine the information, examine the facts, and make the best projections they can in many cases and best analyses they can. And they have determined that as a result of the Recovery Act and the other actions that were taken, we’ve saved over 3 million jobs in this country.
“Again, you’re spiraling downwards, you enact a recovery bill, you begin to turn the corner, and you begin to move upwards. And we’ve now had 29 consecutive months of positive private sector job growth. Those retirement savings that took such a big hit have actually now come back and they’re now at a higher level than they were before the big fall. So there’s much more retirement security there for the American people.
“Now, since elections are about choices, it’s important to ask the question: What was Mitt Romney proposing at that time? What was Paul Ryan doing? What were the Republicans suggesting?
“Well, what Mitt Romney said he thought there was an important government role in rescuing the financial sector. So when it came to the meltdown on Wall Street – the financial collapse – he said, ‘Yeah, I think there’s a role for government there.’ But when it came to rescuing Main Street and the auto industry and American manufacturing, he said, ‘No. Let them go bankrupt.’ So it’s not that he doesn’t see the government playing any role in times of emergency in the economy. He was all in to rescue Wall Street, but he was AWOL when it came time to help Main Street and American manufacturing.
“And you probably all remember when he was out in Nevada, where the housing prices plummeted through no fault of specific homeowners in Nevada, and he rejected the idea of coming up with some kind of plan to help creditworthy homeowners whose home prices have plummeted through no fault of their own, who are underwater on their mortgages through no fault of their own. He said, ‘Just let it hit bottom.’ That was his answer.
“So, again, didn’t want Wall Street to hit bottom. But auto industry, American manufacturing, homeowners who were underwater through no fault of their own – no government role there.
“What about the new VP candidate, Paul Ryan? Well, it’s been reported that 3 days before the President was inaugurated – before he was inaugurated – Paul Ryan with a group of what are called ‘The Young Guns’, who are now some of the big leaders of the Republican House leadership, they gathered in Washington and decided to come up with a plan on how they were going to work against the President. And as one of them said their plan was to essentially oppose whatever the President proposed. This was before they even knew what the President was going to propose. That was their plan.
“And, of course, we all know the remark that was made by the Republican leader in the United States Senate, Mitch McConnell, who when asked what his top priority was said not jobs, not the economy, but defeating the President.
“So right from the start, the President was facing a major effort to defeat him rather than focus with him on solving the problems the country faced.
“So what happened? Well, the first bill the President proposed was Lilly Ledbetter legislation – this legislation to allow women who have been discriminated against based on pay in the workforce have an opportunity to get justice. So every Republican in the House leadership voted against that – that was the first bill the President – pretty straightforward – but voted against it. Think only 3 House Republicans voted for it but the whole House leadership voted against it. Paul Ryan voted against it.
“And the next up was the Recovery bill. Not a single House Republican voted for it. Again, that play book was what the President proposes, we’re going to oppose.
“Now, that of course didn’t stop a lot of Republican members of Congress, once the Recovery bill was passed, from asking for some of that help – Recovery money, stimulus money – to help boost jobs in their own states, in their own districts. And many of those have been widely reported on at the time.
“Interestingly, just yesterday, the Boston Globe had a story about how Paul Ryan had sent a letter to the Department of Energy in December of 2009 asking for funds to help boost the local economy in Wisconsin. In fact, the letter said it would help stimulate the local economy by creating new jobs.
“So again, no votes for the Recovery bill – hard ideological line against it. And yet, Republican members of Congress recognized it could help in their local economies.
“Now, the President has been the first to recognize that we need to do a lot more to help put Americans back to work. He understands that this recovery remains very fragile and millions of Americans are hurting. And he has proposed – he has proposed – another major jobs initiative. He submitted that to the Congress last September – includes a number of very important elements.
“One of the most important elements would be a major new investment in our nation’s infrastructure in our roads, our bridges, and our transit ways and our ports. Because if you look at the reports by the American Society of Civil Engineers – not a right-wing group, not a left-wing group – they give the United States a grade of ‘D’ when it comes to the state of our infrastructure.
“If we’re going to compete with our international competitors, we need a 21st century infrastructure – on energy infrastructure, on other forms of the foundations that help move goods and services around the country and, of course, around the world. And the President proposed that – $50 billion major initiative. He also proposed additional measures to help small businesses.
“That was in September. We haven’t had a vote in the House of Representatives on the President’s jobs initiative. We have now voted 37 times in the House of Representatives to repeal Obamacare, to repeal the Affordable Care Act, but not a single vote on the rest of the President’s jobs initiative.
“Now, last September, the President also submitted a plan for long-term deficit reduction. Because we have two big priorities. One is to nurture and boost the very fragile recovery that we remain in, and it’s important to pass the jobs initiative to do that and to take other measures to accomplish that.
“One of the other measures the President, of course, has proposed is providing some confidence to the country by extending immediately tax relief for the vast majority of the American people – the middle-class taxpayers, 98% of the country, 97% of pass-through businesses. Overwhelming number of American people and small businesses.
“We need to do it now to provide that confidence. But we also need to be serious about taking a credible plan and posture with respect to our long-term deficits because our long-term growth is going to require that we get our deficits under control and we should do it in a balanced way. Because if we don’t get our deficits under control, over time, that additional government spending will crowd out new private investments. So we got to do that.
“And so the question is how do you do that? And last September, the same time the President submitted his jobs initiative that hadn’t have a vote, he also submitted his plan for long-term deficit reduction. Of course, he re-submitted that in January as part of his budget. And it would reduce the deficit over the next 10 years by $4 trillion – that was the target established by the bipartisan Simpson-Bowles Commission. He does it in a balanced way. In fact, it includes $2.50 of spending cuts for every dollar of additional revenue. A balanced approach. A shared responsibility approach.
“And Erskine Bowles, of course one of the co-authors of the Simpson-Bowles report, just recently penned an Op-Ed piece in the Washington Post that said the following and I quote:
“‘In contrast to Romney, the President – like the Gang of Six and other like-minded members of both parties – has embraced the central principle of Simpson-Bowles: That America will turn the corner on its debt only if Republicans and Democrats come together to support a balanced deficit reduction plan.’
“That the President has embraced the central principle of Simpson-Bowles, that we need a balanced approach to deficit reduction.
“And anyone who’s a true fiscal conservative – you know, old style fiscal conservative – recognizes that we got to get our deficits under control over the long-term. And if you’re serious about it, you recognize that we got to deal with both sides of the budget equation: spending and revenue.
“And that is, of course, the great failing of the Romney-Ryan approach. Because the Ryan budget – which has been embraced by Gov. Romney. He said it’s a marvelous document. He said he’d sign it if he’s President – takes a totally uncompromising, hard-edged, right-wing, ideological approach to our economy and to our budgets. It doubles down on this notion that somehow tax breaks for folks at the very top will boost the economy, and it does so at the expense of everyone and everything else.
“So let’s just unwind this a little bit. It would provide these big tax breaks – right? Again, the theory is that providing people like Mitt Romney another tax break, it will trickle down and boost up the economy.
“And as I said at the outset, we’ve tried this before. It’s no longer a theory. We have the evidence. The results are in. At the end of the 8 years of the Bush administration, after tax cuts that disproportionately benefitted folks at the very top, we actually had a net loss in private sector jobs. The only thing that went up was the deficit, and it went way up.
“So why in the world would we go back to a playbook that didn’t help the economy and drove up the deficits?
“We know from the Clinton years that a balanced approach to the economy and to the budget and to the deficits can lead to huge job growth – 20 million jobs were created during the Clinton administration after the 1993 Clinton tax plan.
“And the President’s simply saying with respect to folks at the very top, ‘We can no longer afford that.’ Of course, Republicans are taking a position they won’t pass it now – because they’re going to hold the middle-income taxpayers hostage until they can get tax breaks for the folks at the very top – when I thought they agreed that we have this long-term fiscal challenge we have to deal with in a balanced way.
“So that’s one problem – the economic theory’s just been tested by reality and it failed.
“But here’s the thing I think will become very clear during this campaign for the American people. It’s not just that the tax cuts for the wealthy don’t work in terms of boosting the economy, it’s that they come at a huge cost to the rest of the country. Because if you’re serious about deficit reduction over the long-term – and all of us should be – if you ask nothing from the folks at the very top, if you subscribe to the Grover Norquist pledge as 98% of the House Republicans have – they’ve signed that pledge – it says that not one penny of additional revenue can come from the wealthiest Americans to help us as a country to reduce our deficits. Not one penny. Well, the American people can do the math on this. If you say from the outset you’re not going to ask for one penny from the wealthiest Americans and you want to deal with the long-term budget deficits, everyone and everything else gets hit.
“So let’s look at a couple of examples. Let’s start with middle-class taxpayers. The Tax Policy Center, which is an independent non-partisan body recently did an analysis of the Romney tax plan, and they concluded that by providing these big tax cuts for the very wealthy, if you want to do that in a deficit-neutral manner, you’re going to have to end up raising the tax burden on middle-income taxpayers because you’re going to have to eliminate a lot of deductions that are in the tax code that do help middle-income taxpayers – mortgage interest deductions, the current exemption for the health insurance provided by employers. All those deductions are at risk, and therefore the price to be paid for tax breaks for the folks at the very top – another round of them – if you want to do it in a deficit-neutral manner, which is what they say they want to do because they say they’re real fiscal conservatives, that means that other people are going to have to pay more through eliminating some of those important deductions that people rely on.
“So I can support tax reform. But what I cannot support is tax reform masquerading as a Trojan horse for another round of tax breaks for the folks at the very top at the expense of everybody else.
“And I should say that earlier in his campaign, Gov. Romney pointed to the Tax Policy Center as an authoritative independent source when they did analysis that worked in his favor because they are an authoritative independent source.
“It should be said that under the Ryan roadmap tax plan, Mitt Romney’s tax rate would drop to below 1%. Now, I can understand why Gov. Romney likes that plan.
“But an independent analysis was just done the other day by Roll Call and others, it showed that if you applied that version of the Ryan plan to Mitt Romney’s 2010 taxes, it would drop from 15% – which of course is already a pretty low effective rate for someone at that income, to under 1%. And who picks up the tab for that if you’re serious about reducing the deficit? Everybody else. And so it will hit middle-income taxpayers harder.
“We had an amendment in the Budget Committee Democrats offered when this plan was put forward in the Budget Committee by Paul Ryan. It said, ‘Okay, let’s test this.’ We had an amendment that said, ‘Okay when you do tax reform, do not increase the tax burden on taxpayers under $250,000.’ They voted against it because they know that that’s the fundamental implication of that plan.
“So who else does it hit? Well, it hits our economy and our growth, and it hits opportunities for more Americans. Because, again, if you’re serious about deficit reduction – we all should be – and you ask nothing from people at the very top, you’re going to cut deeply into education funding, you’re going to cut deeply into research, in science, in innovative technologies, and you’re going to cut deeply into our infrastructure.
“In fact, the Ryan budget cuts deeply into infrastructure spending – would dramatically under that budget plan reduce it next year. Reduce it – not provide a bigger investment as the President has called for but actually cut it. And that’s at a time when not only we have unmet needs, but we have 14% unemployment in the construction industry.
“So if we’re going to compete with our – you know – with China and India and everybody else in the world, we need a first-class 21st century infrastructure, and it would cut deeply into that – training at community colleges, education for kids. That’s a bad choice to make – to get rid of those important investments to allow everybody in this country to reach their full potential.
“And finally – I just want to focus on this very important issue in closing. It hits seniors very hard. It hits seniors very hard – seniors on Medicare and people who rely on Medicaid.
“Now, there’s no doubt that now and over the longer term we need to deal with the issues of rising health care costs. Rising health care costs are not unique to the Medicare program. We have rising health care costs throughout our health care system. We spend 18% of our Gross National Product on health care – far more than any other industrialized country. So there’s no doubt we need to deal with those rising costs.
“But there’s a fundamental difference between the way the President has proposed to do it and the way Democrats have proposed to do it and the way that Gov. Romney and Paul Ryan have proposed to do it.
“So under the President’s approach, as we began in the Affordable Care Act – what we said is we need to move the health care system, especially Medicare, away from a fee-for-service system that rewards the volume of care and the quantity of care over the value of care and the quality of care. We need to move the incentive structure away from that to reduce costs in the health care system.
“Let me give you an example: Hospitals. When you have a patient that goes into a hospital, hospital gets paid by Medicare, right? It should. They get paid. Patient gets released from the hospital and develops complications from the same condition the patient originally went to the hospital for. Re-admitted to the hospital. Hospital gets paid again by Medicare. The hospital has no financial incentive under the current system to coordinate the care for the patient once the patient’s left the hospital. That doesn’t make sense.
“So as part of the Affordable Care Act, we changed that. We’re moving to a payment for accountable care organizations to make sure that there are incentives to coordinate care for the patient so you’ll avoid the extra costs from repeated hospital admissions.
“Let me give you another example. You know, a lot of people don’t realize that Medicare already has a private plan component – Medicare Part D, private health insurance. So it turns out that the Medicare program was compensating private insurance plans – Medicare Advantage plans – on average 114% of the fee for service plans. In other words, these private plans that were originally established to try and reduce costs in Medicare actually increased costs in Medicare.
“So one of the thing we did was we began to eliminate those over-payments – that excessive subsidies that was not only paid for by taxpayers but by every Medicare recipient who is in the fee for service plan because they pay higher premiums for those plans. So we said, ‘That doesn’t make any sense at all.’ And we reduced those, and we used some of those savings to strengthen some benefits in Medicare. The prescription drug donut hole was closed so seniors with very high prescription drug costs aren’t left high and dry. We used that to encourage more preventive health care by eliminating the co-pays for preventive care so more seniors would get early preventive care before they develop more chronic conditions that are higher costs. So those are the kind of things that we did to save money in Medicare, and that’s how we used some of the money to strengthen benefits in Medicare.
“And I should point out – I only have one, I may have two, but we’re near the end here. Don’t worry about it. I just want to point this out.
“Here’s what the Medicare Trustees – this is really an important issue and we should be talking about these issues. This is what the Medicare Trustees’ report says – this is a non-partisan. These are the guys that are the trustees: ‘The financial outlook for the Medicare program is substantially improved as the result of the changes in the Affordable Care Act.’ That’s Obamacare.
“‘Substantially improved.’ Again, because of some of the savings that we talked about, the dollars can go farther and we use some of those dollars for the purpose of improving some of those benefits that I talked about.
“So what’s the Romney-Ryan approach? It’s not to reduce overall health care costs. It’s to simply transfer those rising health care costs from seniors on Medicare – from the Medicare program to seniors on Medicare, which is why the Congressional Budget Office said that under the earlier version of the Ryan plan, 10 years from now seniors on Medicare will pay $6,000 more for the same set of benefits.
“And the new plan, which is in morphis, no matter what – it is going to cost seniors more for the same reason. You’re simply transferring the cost off of the Medicare program – not reducing costs and saving costs in an efficient way – transferring them to seniors on Medicare. At the same time, your budget says we’re going to provide these big tax breaks for those at the very top.
“Now, the other point I want to make is that the health care plan for members of Congress – members of Congress are on the same health care plan as federal employees – provides protections for members of Congress against rising health care costs because it’s a fixed percentage – it’s real premium support as opposed to a voucher plan. So as health care costs rise, members of Congress can be assured that 72% of those costs will be covered by the health care plan.
“They’re proposing a much worse deal for seniors on Medicare than they have for themselves. A much worse deal. Because under their plan – again, it’s the way they save money – is to de-link, is to de-link the amount that seniors receive from the Medicare program from the costs of Medicare. And the result is – and I guarantee this will be my last chart – if you see this green line here that represents the steady premium support members of Congress get under their plan – about 72% covered by the Federal Employee Health Benefit Plan. That red line is what happens to Medicare recipient support under their voucher plan. The amount that the senior citizen gets from Medicare drops dramatically and, of course, that means either their costs go way up and become unaffordable or they get less coverage or less benefits. Again, at the same time folks at the very top are getting a better deal.
“Now, I want to make one last point on this Medicare issue before I close. You’ll hear a lot about the fact that ‘Oh, the Republican plan doesn’t touch seniors over 55 years old.’ That’s not true, and here’s why.
“I mentioned that we used some of the savings by getting rid of the over-payments to the private insurance companies in Medicare to close the prescription drug donut hole and to cover preventive health care services. The Republican budget doesn’t cover those. It re-opens the prescription drug donut hole. So if you’re a senior on Medicare with high prescription drug costs, you are going to be paying thousands of dollars more over the next 10 years – thousands dollars more than you would today. And if you use a lot of preventive health care services – and we hope people will because that will save money long-term – it will cost you more under the Republican plan now, immediately, not 10 years from now. So it’ll cost you more immediately, and in 10 years when the other plan goes into effect, that’s when seniors get a much worse deal than members of Congress.
“Now, this is important because Romney’s out there running his ad saying that the President and the Democrats, you know, they cut Medicare. I think I – hopefully I’ve been clear that no benefits were touched. We did get rid of over-payments and subsidies to some of the private insurance companies that were being overpaid – it was a waste of taxpayers’ dollars. As the Medicare Trustees said that helps extend the life of the trust fund. And we used some of those savings to strengthen Medicare benefits.
“And in the Ryan budget, they took all those savings. They wanted to pocket the savings that we achieved from Medicare reform in the Affordable Care Act but they didn’t spend one penny on strengthening Medicare benefits. They didn’t close the prescription drug donut hole. They didn’t improve coverage for preventive care. They didn’t do that. Took the money and not that.
“And that’s why you saw Paul Ryan on television last night getting all twisted up in knots. Because the total hypocrisy of their position is being exposed because in the Ryan budget they take all those savings that they’re running ads against only they didn’t use any of those savings to strengthen Medicare in their budget. We did. And they would take those away – not 10 years from now, but now.
“So this is a fundamental debate. Again, the approach we’ve talked about, as the Trustees said, reduces those health care costs by finding greater efficiencies in the system and changing the incentive structures – not just a question of rooting out waste. There is waste and the Obama administration has actually rooted out more than any of his predecessors. We got to change those incentive system I was talking about and we do that, and that way you can reduce costs without hurting the seniors.
“So let me – I’m going to close now. But there’s been a lot of talk about how this is a brave and courageous budget, and I disagree because I don’t think it’s brave or courageous at all to provide another round of tax breaks to very wealthy people at the expense of seniors on Medicare, at the expense of investments in education and infrastructure and economic future, and at the expense of the middle-income taxpayers. And I don’t think it’s courageous at all to change the tax system to encourage off-shoring more American jobs rather than creating more tax incentives to build jobs right here at home. And I don’t think it’s courageous to whack the Medicaid program, which millions of seniors rely on, two-third of which helps seniors in nursing homes and individuals with disabilities, and they really whack that as well. I don’t think that’s brave or courageous.
“Take on Grover Norquist. Take the balanced approach that, as Erskine Bowles said, the President’s approach takes. That’s what we need to do, not the uncompromising our-way-or-the-highway approach that Republicans have taken, which will simply take us back to the beginning of the road of the 8 years of the Bush administration and we know what happens at the end of that road.
“So this is going to be a huge election for the country. I appreciate your time and attention. I hope very much that this election will be about fundamental choices about the direction of the country.”
- C-Span.org: Rep. Van Hollen (D-MD) Offers Insights on Paul Ryan
- WhatTheFolly.com: Romney insists he paid at least 13% in taxes
- WhatTheFolly.com: House Republicans pass Ryan budget
- WhatTheFolly.com: Analysis: Republican budget will cripple Medicare, Medicaid & children’s health insurance
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